Australia has canceled a $90 billion submarine deal with France in favor of the US and UK nuclear submarines. This new contract was part of the security AUKUS pact between the Australian, the UK, and the US governments. France received information on the cancellation at the last minute, viewing Australia's choice as a stab in the back.
The Australian Submarine Deal with France
Australia and France signed a strategic partnership agreement (SPA) in 2019; according to the SPA, Australia had the option to use off-ramps or exit gates points in the event of poor performance.
The submarine defense contract was awarded to France's Naval Group after it outbid German and Japanese contractors. The Naval Groups got the deal to build diesel-electric versions of its Barracuda submarines. Although France was open to converting them to nuclear-powered subs, the Australians favored the AUKUS deal, and, as a sign of displeasure, Paris recalled its ambassadors from Canberra and Washington.
Delays and Cost Overruns
According to Australian parliamentary hearings and reports, the project had many delays and cost overruns. Particularly, the Australian submarine deal with France had an initial price of $40 billion but had recently increased to $60 billion, which was evident before construction had begun. Government ministers stated that they had been straightforward with France about the seriousness of the issues.
Australia and France announced the deal in 2016, but the signing was delayed to 2019 because a pre-design review in 2018 didn't meet the Australian Defence's requirements. The first version lacked design details, operational needs, and 63 studies.
Miscommunication between Australia and France
In June, the Australian Defence Secretary signaled that alternative planning for the project was underway. French parliamentary records also show that a lawmaker had raised concerns in parliament that Australia might be looking elsewhere.
But wires might have been crossed because when the parties to AUKUS came out to the public, Australia sent a communication to France on the same day saying they were satisfied with the submarine's achievable performance and the program's progress. According to France's Armed Forces Ministry spokesman Herve Grandjean, the communication implied that they were on track to launch the next phase of the contract.
“This has been a huge mistake, a very, very bad handling of the partnership,” French ambassador Jean-Pierre Thebault said before flying back to France.
Learn More with EXIMA News
EXIMA News is here to provide you with all the latest updates on global news. Take a look at our News Page to learn more about current events!
