Australia Submarine Contract Award in Final Stage

 

The navy's new submarine fleet could reportedly cost taxpayers at least $5 billion less than expected, secret price estimates given to Defence by three international competitors show.

 

The confidential bids lodged by Germany, France and Japan offer a much lower cost of building an eight-submarine fleet in Adelaide than was anticipated, The Australian newspaper reported on Saturday. 

 

Each of the three bidders for the submarine contract — Germany’s TKMS, France’s DCNS and the Japanese government — has refused to disclose publicly their final estimated costs of building the new fleet.

 

The savings are in the range of $10bn to $12bn, when it was previously expected the project would cost about $20bn, based on a 12-boat fleet. 

 

If the government decides to build 12 submarines instead of eight, the bidders estimate the cost will reach about $15bn - a potential $5bn saving.

 

The Australian government wants the largest and most sophisticated conventional submarine ever built, a 4000-plus tonne boat with a US combat system and the ability to fire cruise missiles and deploy special forces.

 

Australia plans to construct 8 to 12 new submarines in a project worth 20 billion Australian dollars. Including long-term maintenance expenses, the total cost is seen ballooning to about AU$50 billion.

 

The Prime Minister and Defence Minister Marise Payne have delayed the release of the white paper until the first quarter of next year and have left open the prospect of revising the contents of the blueprint, including the size of the submarine fleet.