Australia, France Sign $35.5 Billion Submarine Contract

 In Government, Defense, Sea, Australia, Japan, Germany, France, Domains

The Australian gov­ern­ment and French state-owned sub­ma­rine builder Naval Group signed a strate­gic part­ner­ship agree­ment (SPA) on February 11 for the pro­duc­tion of 12 Shortfin Barracuda Block 1A sub­marines, chris­tened Attack-class, a diesel-elec­tric deriv­a­tive of the Barracuda-class nuclear attack sub­ma­rine (SSN), under the Royal Australian Navy’s SEA 1000 Future Submarine Program (FSM).

The pro­duc­tion con­tract was signed in Canberra today by Australian Prime Minister Scott Morrison, the Defense Minister Christopher Pyne, and the French Minister for the Armed Forces of France, Madame Florence Parly.

“The $50-bil­lion Attack-class pro­gram will deliv­er sub­marines that will meet our Navy’s capa­bil­i­ty require­ments, will be at the fore­front of Australia’s defense strat­e­gy and will help pro­tect Australia’s secu­ri­ty and pros­per­i­ty for decades to come,” Vice Admiral Michael Noonan, the chief of the Royal Australian Navy, said in a state­ment. “With their inher­ent stealth, long-range endurance, and for­mi­da­ble strik­ing power, the Attack-class are a key part of our Navy’s future,” he added.

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Australia and France concluded an intergovernmental agreement (IGA) for the con­struc­tion of 12 Attack-class boats in December 2016. Long thought to be the fron­trun­ner for the con­tract, Japan’s Mitsubishi Heavy Industries failed in its bid to build the future Attack-class. An offer by Germany’s ThyssenKrupp AG was also reject­ed.

Up until now, Naval Group has been work­ing under a $361 mil­lion 2016 design and mobi­liza­tion con­tract while SPA nego­ti­a­tions were ongo­ing. “Some work on the future sub­marines has already taken place under a design and mobi­liza­tion con­tract and this will con­tin­ue unin­ter­rupt­ed under today’s agree­ment,” the Royal Australian Navy said in a state­ment today. “The for­mal­iza­tion of the [SPA] rep­re­sents the con­trac­tu­al basis for the pro­gram.”

As I noted in December 2018:

Under the IGA, the 12 subs, save for some spe­cial­ized parts, will be built in Adelaide in South Australia, home to the Australian Submarine Corporation (ASC). Initial design work for the new sub­ma­rine class is cur­rent­ly taking place in Adelaide and Naval Group’s head­quar­ters in Cherbourg, France. A detailed design con­tract, how­ev­er, can only be con­clud­ed after the sign­ing of the SPA. Construction of the first sub­ma­rine is expect­ed to begin in 2022 with the first boat deliv­ered to the Royal Australian Navy by the early 2030s.

Australia and France will now move on to swift­ly con­clude the design con­tract.

The con­clu­sion of the SPA was pre­ced­ed by a two-year wran­gle over con­tract details. Negotiations for the SPA kicked off in 2017 and were expect­ed to be con­clud­ed by September 2018. However, var­i­ous dis­agree­ments over intel­lec­tu­al prop­er­ty and war­ran­ty peri­ods for defects, as well as pos­si­ble pro­duc­tion delays, caused the SPA sign­ing date to be repeat­ed­ly pushed back. The Australian Department of Defense also voiced con­cerns over a future sale of Naval Group, which is major­i­ty owned by the French state, to a pri­vate entity and its pos­si­ble neg­a­tive impact on Australian-French col­lab­o­ra­tion on the sub build­ing project.

Source: The Diplomat

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