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Australia, France Sign Framework Agreement for $35.5 Billion Submarine Deal

 
 

Australian government-owned shipyard Australian Submarine Corporation (ASC) and French state-owned submarine builder Naval Group signed a framework agreement on February 25 for the production of 12 Shortfin Barracuda Block 1A diesel-electric submarines (SSK), christened the Attack class, a diesel-electric derivative of the Barracuda-class nuclear attack submarine, under the Royal Australian Navy’s SEA 1000 Future Submarine Program.

The framework agreement, signed two weeks after the conclusion of the long awaited strategic partnership agreement (SPA), identified ways Naval Group and ASC would collaborate for the provision of supplies and services to each other to support the SEA 1000 Future Submarine Program through separate commercial arrangements.

“The Framework Agreement includes workforce development such as training apprentices, occupational health and safety training and services, as well as helping Naval Group tap into ASC’s existing supply chain,” Australia’s Minister for Defense Christopher Pyne was quoted as saying in a February 25 Department of Defense statement. “ASC Submarines has an important and enduring role in the success of Australia’s sovereign submarine capability.”

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Australia and France concluded an intergovernmental agreement (IGA) for the construction of 12 Attack-class SSKs in December 2016. Naval Group has been working under a $361 million 2016 design and mobilization contract while SPA negotiations were underway. “This will continue uninterrupted under the [SPA] agreement,” the Royal Australian Navy said in a statement on February 11. “The formalization of the [SPA] represents the contractual basis for the program.”

Negotiations for the SPA began in 2017 and were expected to be concluded by September last year. However, various disagreements over intellectual property and warranty periods for defects, as well as possible production delays, caused a two-year wrangle with the result that the SPA signing date had to be repeatedly postponed.

Under the SPA, the 12 SSKs, except for a number of specialized parts, will be built in Adelaide in South Australia, home to ASC. Construction of the first submarine is expected to begin in 2022 with the first boat delivered to the Royal Australian Navy by the middle of the 2030s. Given that the Royal Australian Navy’s Collins-class SSKs are expected to retire by 2026, the service life of the sub fleet may need to be extended and the majority of boats overhauled and upgraded.

“We are yet to fully determine how many of the boats we will upgrade,” Royal Australian Navy Chief Vice Admiral Mike Noonan was quoted as saying in Australian media. “We’re expecting that we will upgrade at least five, and the work around determining the scope of the upgrade has begun but has not yet been fully decided.”

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