The breakdown of the agreement between Australia and France on non-nuclear submarines could end up costing Australian taxpayers 5.5 billion Australian dollars (4.15 billion US dollars), despite the fact that the deal was torn up long before the construction of the ships began. Writes about this Andrew Greene in an article for ABC News.
Design image of a promising non-nuclear submarine, which was supposed to be built for the Australian Navy under the Future Submarine Program (c) AFP / Naval Group
During the hearings in the Australian Senate, representatives of the Ministry of Defense of the country were asked about the ongoing discussions on the payment of compensation to the French shipbuilding association Naval Group.
The Australian-French contract for the construction of submarines worth $90 billion, signed in 2016, was canceled when last year the Australian government announced plans to purchase nuclear submarines as part of an expanded trilateral security partnership with the United States and Great Britain - AUKUS.
Responding to a question from Labor Senator Penny Wong, Australian Deputy Defense Minister Tony Dalton confirmed that the final cost of the aborted program could exceed 5 billion Australian dollars.
"So now there is a situation in which taxpayers will pay up to $ 5.5 billion for non-existent submarines?", Senator Wong asked.
Mr. Dalton replied that "the final settlement of this issue through negotiations will be within the specified amount." At the same time, he noted that the final cost estimates are not accurate, since negotiations on compensation claims are still ongoing.
The head of the Finance Department of the Australian Ministry of Defense, Stephen Groves, also confirmed that negotiations with companies that have lost orders for major work are continuing and may last until next year. "We don't have a more precise amount for the 2022-2023 fiscal year, I can't name another figure," Groves said.
Asked if he was "embarrassed" by the disclosure of this information, Finance Minister Simon Birmingham defended the government's actions.
"I would like us to get more information and access to nuclear submarine technology earlier. But we didn't have this technology or information," he said. "We knew that changing the course from diesel submarines to nuclear submarines was fraught with serious consequences, but we were ready to make these difficult decisions."
Shadow Defence Minister Brendan O'Connor has demanded the government report on any possible cuts to payment programs for French submarines that will never be delivered to Australia.
"Unfortunately, the Morrison government's vague data on French submarines is not surprising," O'Connor noted. "This is a government that boasts about its defense spending, but it is estimated in billions of dollars."
