France secures US$39 billion Australian submarine deal

Asia-Pacific, News April 27, 2016 , by IRIA No Comments

Australia has ordered 12 new submarines at a cost of US$39 billion to compete in Asia’s submarine race

CANBERRA, (Australia) — France has won a US $39 contract to build 12 submarines for the Australian Navy, beating bids from Japan and Germany.

“This is a momentous national endeavour,” announced Australia’s Prime Minister Malcolm Turnbull.

Turnbull said the 12 new Shortfin Barracuda Stealth Submarines in Australia to be delivered by French contractor DCNS under the country’s biggest ever defence contract “will be the most sophisticated naval vessels being built in the world”.

The submarines “will be built here in Australia … with Australian jobs, Australian steel, and Australian expertise”, PM Turnbull said. However, some components may come from other states of Australia or other countries including the combat system, which will be sourced from the US.

The submarines cost A$50bn (€34bn) and will take $20bn to build and $30bn to sustain after they come into operation in the middle of the next decade.

French President Francois Hollande hailed the decision as historic.

“It marks a decisive advance in the strategic partnership between the two countries who will cooperate over 50 years,” his office said.

The deal came as tensions grow between China and Australia’s allies Japan and the United States. Beijing is flexing its muscles in the region by developing airstrips and other facilities on reclaimed reefs in the contested South China Sea.

What submarines will DCNS be building?

The Shortfin Barracuda is a 4,500-tonne conventionally powered submarine and is closely related to the nuclear-powered Barracuda which weighs 4,700 tonnes.

DCNS has said the full details are confidential, but the Shortfin Barracuda is known to be over 90 metres in length and to feature an advanced pump-jet propulsion system that is supposed to be quieter than propeller propulsion systems.

“The Shortfin Barracuda will remain in service until the 2060s and will be updated and upgraded with new technology developed in France and Australia,” DCNS chief executive, Sean Costello said.

“This is a great opportunity for DCNS because they will work with the Australian navy for the long run as it is a series of contracts and a huge opportunity to invest more and to develop business,” French Economy Minister Emmanuel Macron said on the sidelines of a trade fair in Hannover, Germany.

Other bids by Germany and Japan

The Japanese bid, with a consortium led by Mitsubishi Heavy Industries Ltd, proposed a version of its 4,000-tonne Soryu-class submarine, lengthened by between 6-8m.

The German bid, from company TKMS, offered a 4,000-tonne version of an existing 2,000-tonne Type 214 class submarine.

David Brewster, from the ANU Strategic and Defence Studies Centre in Canberra, said the choice of France was about “capability, cost and risk reduction over broader strategic factors which favoured the Japanese bid”. And that it “may give Australia the best submarines, but it also means that we need to give much more active focus to engaging with Japan as our key regional security partner in the Pacific,” he added.

Tokyo questions Canberra’s submarine decision

Japan and Germany submitted unsuccessful bids for the contract and Tokyo has already expressed disappointment in Australian Government’s decision and requested an explanation.

The Japanese government has asked Australia to explain why it decided not to pick a Japanese design for a new fleet of submarines, choosing instead a proposal from France’s DCNS.

“The decision was deeply regrettable,” said Japan Defence Minister Gen Nakatani. “We will ask Australia to explain why they didn’t pick our design.”

However, Australian PM said the French bid “represented the capabilities best able to meet Australia’s unique needs”.