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French company commits to $900m for local submarine manufacturing jobs

The Sydney Morning Herald and The Age this week revealed Defence officials had secretly budgeted for the submarines to cost almost $80 billion five years ago, despite publicly stating at the time the estimated price tag was $50 billion.

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Naval Group will on Friday release an expression of interest to Australian industry to manufacture the specialised equipment, which will run until November 16.

Naval Group’s executive vice-president Jean-Michel Billig said the package demonstrates the company’s “clear commitment to Australian industry and will lead to increased manufacturing capability in Australia and local jobs”.

“Through this manufacturing occurring in Australia, local business capability will be enhanced for generations meaning the legacy of this program goes beyond the regionally-superior submarines we will deliver,” he said.

Defence Minister Linda Reynolds said the commitment showed “the significant benefits to Australian industry that will flow from the Attack Class Submarine Program”.

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“As we approach the preliminary design in January 2021, this is a critical phase of the program where we are in the process of designing and selecting more than a million submarine parts that need to work perfectly together,” she said.

Last week’s federal budget committed an undisclosed amount for a new submarine construction yard in the Adelaide suburb of Osborne and for other “future infrastructure works” within that precinct.

The Morrison government has been sitting on a politically sensitive decision over whether to shift lucrative submarine maintenance work for the Collins-class submarines from South Australia to Western Australia.

The Collins-class submarines need to undergo full cycle docking to extend their shelf life to avoid a capability gap while the future submarines are being built.

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Asked whether the funding injection meant the full cycle docking work will stay in Adelaide, a Defence spokeswoman said the funding injection did not presuppose the government’s decision.

“Future full cycle docking activities for the Collins-class submarine are under consideration by government and a decision will be made in due course,” the Defence spokeswoman said.

“Any future decision made will be in the national interest.”

The first future submarine is not slated to enter service until the mid-2030s, while the delivery of the last will take place in the mid-2050s.

While the construction price tag alone now sits at $90 billion, the attack-class submarines are estimated to cost at least $225 billion to build and maintain until the middle of the century.

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