The Australian government will pay the French shipbuilder for a canceled submarine contract

The Australian government will pay the French shipbuilder for a canceled submarine contract

After canceling a submarine contract, the Australian government agreed to pay a French shipbuilder 830 million Australian dollars on Saturday. Prime Minister Anthony Albanese announced that the government will pay Naval Group $830 million in compensation for the canceled contract, claiming that the “fair and equitable” settlement will strengthen relations between the two countries. Former Prime Minister Scott Morrison was previously accused by French President Emmanuel Macron of lying regarding the future of the submarine agreement.

The Coalition government in 2016 awarded Naval Group, then DCNS, a contract to build a fleet of 12 new attack class submarines at a cost of 50 billion Australian dollars (35.2 billion U.S. dollars), making it one of the biggest defense contracts in the Australian history. Amid disputes over where the submarines would be built and delays the projected construction cost blew out to 89 billion Australian dollars (62.7 billion U.S. dollars), with maintenance expected to cost a further 145 billion Australian dollars (102.2 billion U.S. dollars) through to 2080, the Coalition tore up the contract in 2021.

“I intend to have an honest relationship with France and one that is based upon integrity and mutual respect,” Albanese, whose Labor Party defeated Morrison’s Coalition in May’s general election, told reporters. “I’m looking forward to taking up President Macron’s invitation to me to visit Paris at the earliest opportunity, and we will make further announcements forthcoming about the dates in which that will occur.”

Albanese said the settlement took Australia’s total spend on the project to 3.4 billion Australian dollars (2.3 billion U.S. dollars). “It represents an extraordinary waste from a government that was always big on announcements but not good on delivering, and from a government that will be remembered as the most wasteful government in Australia’s history since federation,” he said.

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