Australia’s submarine program with the US and UK could be worth as much as $245 billion Ship’s crew

Reuters

By LewisJackson

CANBERRA, March 14 (Reuters) – Australia’s nuclear submarine program with the United States and Britain will cost up to A$368 billion ($245 billion) over the next three decades, a defense official said Tuesday, the largest single Defense project of the country in history.

US President Joe Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak on Tuesday unveiled details of a plan to equip Australia with nuclear-powered attack submarines, a key step to counter China’s naval buildup in the Indo-Pacific.

Albanese said the program will begin with an A$6 billion (US$4 billion) investment over the next four years to expand a large submarine base and the country’s submarine yards and skilled workers to train.

“This will be an Australian sovereign capability – built by Australians, commanded by the Royal Australian Navy and maintained by Australian workers in Australian shipyards,” Albanese said in San Diego, California.

“The scale, complexity and economic importance of the investment are comparable to the emergence of the Australian auto industry in the post-war period,” Albanese added.

Australia will also provide A$3 billion to expand shipbuilding capacity in the US and UK, with most of the money going to speed up production of US Virginia-class submarines.

The total cost of the submarine program is estimated at A$268 billion to A$368 billion by 2055, about 0.15% of gross domestic product per year, a defense official told Reuters.

The award includes the cost of building submarines and the associated infrastructure and training, and the scheme would create 20,000 jobs in Australia over three decades.

Australian Treasurer Jim Chalmers said the decision was “a game-changing investment” as the government raised questions about the price amid mounting pressures on the federal budget and protracted deficits.

“Australia cannot afford not to do this … it will be worth every penny when it comes to our national security and our national economy,” Chalmers told reporters.

Opposition leader Peter Dutton, who was defense secretary when AUKUS was announced in 2021, said he would support the submarine deal “come to hell or flood”.

Great Britain will build the first SSN AUKUS boat, as the new submarine class is called. The first Australian-built boat will be delivered in 2042, and one will be built every three years until the fleet reaches eight.

The construction of Australian submarines will take place in the state of South Australia, where A$2 billion will be spent on infrastructure, creating 4,000 jobs, with a further 5,500 direct shipyard jobs at the peak of construction. The government said that was twice the workforce expected for a scrapped plan to build French-designed conventional submarines.

A naval base in Perth will be home to the new submarine fleet, upgraded over a decade at a cost of A$8 billion and creating 3,000 jobs, documents and statements released by Australia on Tuesday showed.

US nuclear submarines will visit Western Australia more frequently this year, British submarines will make port visits from 2026.

From 2027 the base Perth, HMAS Stirlingwill host a rotating presence of UK and US nuclear submarines to build on Australia’s experience.

Australia will dispose of all radioactive waste domestically, with the Ministry of Defense selecting a site for high-level waste storage this year, defense officials said.

“Yes, it’s a stunning prize, but the alternative is an even heavier prize for Australia’s security and sovereignty along the way,” said Justin Bassi, executive director of the Australian Strategic Policy Institute.

($1 = 1.5006 Australian dollars)

(Additional reporting by Kirsty Needham and Renju Jose in Sydney; Editing by Praveen Menon, Sandra Maler and Gerry Doyle)

(c) Copyright Thomson Reuters 2023.

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