Submarines contracted to be 60% local

The federal government has concluded drawn out negotiations with France’s Naval Group over the local content of Attack class submarines to be built in Adelaide.

Acting defence minister Marise Payne announced today the groups had agreed to amendments to their Strategic Partnering Agreement.

This will see Naval Group’s commitment to spend at least 60 per cent of the contract value in Australia over the life of the program reflected formally in the agreement.

A government statement said the amendments ensured that the achievement of Naval Group’s commitment is now a contractual obligation, measured during the course of the program.

Payne said: “Beyond maximising opportunities for engagement with Australian industry, this will also ensure that the Morrison Government’s requirement for a sovereign Future Submarine capability is met.

“Importantly, the amendments have been incorporated to uphold the current structure of the Strategic Partnering Agreement, which the Auditor General concluded had established a fit-for-purpose strategic partnering framework that addresses this government’s objectives for the program.

“These include maximising Australian industry involvement in all phases of the program.”

Payne said the announcement allowed industry to participate in the manufacture of equipment designed by Naval Group worth ‘hundreds of millions of dollars’ across the 12 boat fleet.

The latest cost estimate for the program is $89 billion.

Naval Group will continue to report the level of contract expenditure in Australia during the course of the Future Submarine Program.

The government’s release was silent on what would occur should Naval Group fail to reach the 60 per cent mark, and did not mention any penalties or other means of redress for Australia should local content fall below the agreed level.

Picture: navy.gov.au

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