Australia will have to pay up to A $ 5.5 billion (€ 3.7 billion) to break its submarine deal with France, after eventually opting for US and British nuclear-powered submarines.
Last year, Australian Prime Minister Scott Morrison canceled a deal with French naval group to build classic (diesel-powered) submarines, choosing nuclear power as an alternative, as part of a historic security co-operation agreement with the USA and UK (AUKUS).
Today, when asked by an opposition senator, Defense Ministry officials revealed that abandoning the contract with France entails paying a high clause.
“Should taxpayers therefore have to pay $ 5.5 billion (Australian) for non-existent submarines?” Penny Wong asked during a meeting in Canberra.
The amount that will result from the negotiation “will be at these levels”, replied the Undersecretary of Defense Tony Dalton. He clarified that the exact amount has not been clarified because the negotiations with the Naval Group are ongoing.
A source close to the French group confirmed that the talks are continuing and “no amount has been determined yet”. The $ 5.5 billion reported to the Australian Parliament “corresponds to the total expenditure” incurred since 2016, not only by the Naval Group but also by Lockheed Martin (the manufacturer of submarine defense systems), as well as as well as the cost of building a shipyard in Osborne, the same source added.
Australian Finance Minister Simon Birmingham insisted the decision to cancel the deal with France was “necessary for decades to come”, noting that the government “knew the consequences would be significant”.
According to a study published in December by the Australian Institute for Strategic Policy, the AUKUS project will cost more than $ 80 billion and will take decades to complete. But it would give Australia a significant advantage in terms of its ability to repel an attack.
Source: AMPE
Source: Capital
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