Australia may have to pay more than $4 billion to France

Australian officials estimate that the country may have to pay up to $ 4.1 billion for canceling the submarine deal with France.

During a hearing on April 1 before the Australian parliament, when Senator Penny Wong asked if the country had to pay up to A$5.5 billion ($4.1 billion) to France after canceling the submarine deal. , Deputy Defense Secretary Tony Dalton said “the final deal will be in this level”.

Mr Dalton said the final cost has not yet been determined due to ongoing compensation discussions. The head of the Australian Defense Department’s finance department, Steven Groves, said negotiations with the French companies could extend into 2023.

Australian Finance Minister Simon Birmingham defended the decision to cancel the submarine deal with France. “We know there are dire consequences to switching from a diesel-powered submarine to a nuclear-powered one, but we are ready to make that decision,” Mr Birmingham said.

Attack class submarine simulator.  Graphics: Naval Group.

Attack class submarine simulator. Graphics: Naval Group.

Australia in September 2021 announced that it was canceling the contract to buy 12 Attack-class diesel-electric attack submarines from the French Naval Group, moving to develop nuclear-powered submarines with support from the US and UK within the framework of the Naval Group. AUKUS agreement.

The submarine contract between Australia and France, signed in 2016, was worth $40 billion at the time of signing and was one of the largest military deals in the world at the time. However, the program has been repeatedly delayed and funded, leaving Australian officials increasingly skeptical of its effectiveness.

Under the contract, the Australian Ministry of Defense selected the Block 1A variant of the Barracuda class submarine built by Naval Group. This is a class of nuclear-powered submarines of France, but modified into a conventional submarine for sale to Australia.

France is estimated to lose about $65 billion due to contract cancellations, which could greatly affect the country’s defense industry in the coming years. The Naval Group has sent a compensation proposal to Australia, but has not announced the specific number.

Nguyen Tien (According to ABC News)

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