The Federal Government has announced plans to shelve its $90bn submarine contract with France and to switch to a nuclear-powered submarine built in a new partnership with the US and UK.
The new strategy is part of a new trilateral pact between the US, the UK and Australia to collaborate on a range of security initiatives. Entitled AUKUS, the partnership will focus in particular on strategic collaboration in the Indo-Pacific region.
Announcing the move, Prime Minister Scott Morrison said: “The first major initiative of AUKUS will be to deliver a nuclear-powered submarine fleet for Australia. Over the next eighteen months we will work together to seek to determine the best way forward to achieve this.”
Australia had planned to acquire 12 new Attack-class submarines to replace its existing Collins class fleet, under a $90bn program with French company Naval Group. Representing Australia’s largest-ever defence contract, the program would have seen the subs built in Adelaide. The break fee for scrapping the deal will cost a reported $400m.
It is not clear what implications the move will have for Australian manufacturing – in particular those companies that had been engaged in the scrapped program’s supply chain. However, the Prime Minister stressed that the new vessels would still be built locally.
“We intend to build these submarines in Adelaide, Australia, in close co-operation with the United Kingdom and the United States,” said Morrison.
Morrison also stressed that the move did not represent a broader shift from Australia’s longstanding stance of not adopting nuclear technologies: “Let me be clear, Australia is not seeking to acquire nuclear weapons or establish a civil nuclear capability. And we will continue to meet all our nuclear non-proliferation obligations.”