The cost of the abandoned project to acquire French vessels is expected to balloon further
The cancellation of the deal to purchase French submarines is expected to cost Australia $591 million (US$381 million) in additional expenses, such as asset write-downs and re-employment programs, officials have said.
The figures were relayed to the Senate, the upper’s house of parliament, by the state-run enterprises Australian Naval Infrastructure (ANI) and Australian Submarine Corporation (ASC) on Monday.
According to reports, ANI posted a $300 million (US$193 million) asset write-down related to the Osborne North Development Project, a naval yard built for the French submarines.
The head of ASC, meanwhile, said that the rehiring of workers from the scrapped program is expected to cost $291 million (US$187 million) over three years.
“Only in a bungled multibillion-dollar defense project would a government even try to hide a lazy $591 [million] in additional costs,” David Shoebridge, a senator from the Australian Greens, said.
“These costs have been ferreted away [from] the defense budget, but they will still have to be paid for by the public,” Shoebridge added.
It’s the opportunity cost of these funds that really hurts. When we pay an extra $591m for not building submarines we lose those funds for public housing, schools or income relief.
Australia abruptly canceled the deal to buy French submarines last year, opting to acquire vessels through a defense agreement with the US and Britain, known as AUKUS.
While the accord was promoted as a general security pact, Australian defense minister at the time, Peter Dutton, said the country should get ready for “more aggressive behavior from China.”
Dutton’s successor, Richard Marles, said in September that AUKUS will help Australia create “a highly capable defense force which [will make] the rest of the world take us seriously.”
Paris heavily criticized Australia for ditching the submarine deal, with French Foreign Minister Jean-Yves Le Drian labeling the move a “stab in the back.”
In June, the Australian government agreed to pay $835 million (US$539) in compensation to the French company Naval Group.
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