Australia floats AUKUS & sinks French submarine project

US and UK form new AUKUS defence partnership with Australia

Australia’s next submarine fleet is now to be nuclear-powered under a plan announced last night that will see the $90 billion program to build 12 French-designed submarines scrapped under a new AUKUS treaty.

A joint statement between US President, Biden, British Prime Minister Boris Johnson and Australian Prime Minister, Scott Morrison, announced that Australia, the UK and US have formed a new security partnership named AUKUS. As a first initiative, AUKUS will build nuclear submarines for Australia’s fleet. The new partnership is designed to counter threats in the Indo-Pacific.

It is seen as a move to “reorient” the three nations submarine and warship fleets to counter China’s increasing regional presence, and the potential hotspot in the South China Sea.

The three leaders said AUKUS would also leverage UK and US expertise to bring cyber, artificial intelligence and quantum computing capabilities to Australia.

Impact on the existing submarine program

The deal is exclusively between Australia, the US and UK, so the federal government will have to abandon the existing deal with the French Naval Group, previously selected to build the next fleet of Attack Class conventional subs in Adelaide.

According to the ABC, Defence had been openly discussing abandoning the $90 billion project since June, as the French deal faltered.

The French-designed submarine project was going to pose some engineering challenges in converting a nuclear-powered submarine design into a diesel submarine. The project has already been delayed by several years.

What AUKUS may mean

Few details have been released but the implications for Australia beyond the massive defence and strategic shift will be a boost to Australian defence manufacturing. The French Naval Group’s deal was that a significant amount of the submarine component manufacturing had to occur here—this seems to be maintained in this new deal with a transfer of manufacturing capability proposed rather than changing supplier to a US maker.

The manufacturing capability of what is highly secret defence technology will have a flow-on effect to information technology and cyber-security requirements. This is mooted in the press release in more general terms.

The new project will have wider needs than just manufacturing. Professional services across the board, from project management, design, security, procurement and recruitment and human resource management, etcetera, will be needed.

Australian businesses will need to prepare themselves for the new requirements and get themselves ready to tender for the new work. Madrigal Communications had been involved in helping a client to tender to the Naval Group so the announcement has impacted on our forward work.