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Going nuclear: PM to announce $90b French submarine deal is dead
The Morrison government is poised to tear up the troubled $90 billion contract with French shipbuilder Naval Group and partner with the United States and United Kingdom to switch to an American-made nuclear-powered submarine.
One source said the dramatic move would be justified that the shift to nuclear technology was required in light of the changing strategic circumstances as China becomes more aggressive in the region.
As an interim step, there were suggestions the US was planning to operate some of its Virginia class nuclear-powered submarines out Perth’s naval base, HMAS Stirling.
The British government, which also operates nuclear-powered submarines, is expected to support Australia with reactor technology locally.
US President Joe Biden is scheduled to give a press conference at 7am Australian time on a “national security initiative”.
Defence Minister Peter Dutton is currently in Washington DC along with Foreign Minister Marise Payne for annual defence and diplomatic talks. Mr Dutton’s office declined to comment the speculation.
But a senior government source told The Australian Financial Review Australia was going to acquire nuclear-powered submarines.
It is understood Mr Morrison had tried to speak to French President Emmanuel Macron on Wednesday, another source said.
Mr Morrison is due to travel to Washington next week for talks with Mr Biden, but it was thought that announcing the new submarine tie up with America together with the President would be deemed provocative.
Senior cabinet ministers met in Canberra on Wednesday for a top secret briefing on the shipbuilding program. Anthony Albanese and other senior Labor MPs have reportedly been briefed on the issues.
Naval Group staff, MPs and defence personnel have also been told to expect a significant briefing on Thursday.
The chief of navy, Mike Noonan, had a planned trip cancelled by Mr Morrison for Thursday’s announcement while Vice Admiral Jonathan Mead, who was commissioned to conduct a review of the submarine program earlier this year, was in Washington DC three weeks ago on the PM’s instructions, a source said.
Retired US Vice Admiral William Hilarides, who chairs the Morrison government’s Naval Shipbuilding Expert Advisory Panel, will be a key figure in the transition.
Mr Biden, Mr Morrison and UK Prime Minister Boris Johnson held a trilateral meeting on the sidelines of the G7 leaders summit in Cornwall in July — a move at the time that was interpreted by some observers as a snub to Mr Morrison that Mr Biden did not grant him a one-on-one meeting.
But if the three leaders were discussing submarines, which are regarded as a country’s most sensitive military technology, that casts the meeting in a whole different light.
Naval Group was meant to build 12 submarines in Adelaide as one of the keystones of the government’s continuous naval shipbuilding program. With the submarines now to be built in the US, deep maintenance of the Collins class submarines is now likely to remain in Adelaide instead of shifting to Perth.
Terminating the contract may cost taxpayers up to $400 million.
Relations between Naval Group and the government have broken down over a series of disagreements over spiralling costs, design changes, schedule slippage and local industry involvement since the French company was selected ahead of German and Japanese designs in 2016.
The Australian Financial Review revealed in February Mr Morrison had commissioned Vice Admiral Mead and Commodore Tim Brown to examine options for Australia’s submarine program as a Plan B to the French-designed boats.
This included exploring an updated design of the navy’s existing Collins class submarine, based on Swedish designer Saab Kockums offer of a long-range, conventionally powered submarine for the Dutch navy.
The government is expected to announce as an interim solution it will extend the lives of the six Collins class submarines to avoid a capability gap.
But in recent times, sources said there had been ongoing discussions with the British government about buying their submarines.
The government’s frustration with Naval Group reached the point where in April it refused to sign a new contract for the next phase of the project, giving the company until this month to refine its offer.
While sources said the Defence Department had offered in-principle approval for the revised offer, it appears the government is about to sink the deal.
Quoting US sources, American media website Politico said the agreement between the three countries, to be known as AUUKUS, would go beyond submarines and cover sharing knowledge about advanced military technology.
I haven't heard about this until now, after 5pm. But my guess is world wide vaccine mandates.Speculations?