Australia to pay French shipbuilder $830 million for scrapped submarine contract

Newly-elected Australian PM Anthony Albanese seeks 'fair and equitable' settlement to improve relationship with France


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Published: Sat 11 Jun 2022, 7:23 PM

The Australian government on Saturday agreed to pay a French shipbuilder 830 million Australian dollars after tearing up a submarine contract.

Prime Minister Anthony Albanese said the government will pay Naval Group 830 million Australian dollars in compensation for the cancelled contract, saying the "fair and equitable" settlement would improve relations between the nations.

French President Emmanuel Macron previously accused former Prime Minister Scott Morrison of lying about the future of the submarine deal.

"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."

The Coalition government in 2016 awarded Naval Group, then DCNS, a contract to build a fleet of 12 new attack class submarines at the cost of 50 billion Australian dollars (35.2 billion U.S. dollars), making it one of the biggest defence 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, with maintenance expected to cost a further 145 billion Australian dollars through to 2080, the Coalition tore up the contract in 2021.


Albanese said the settlement took Australia's total spend on the project to 3.4 billion Australian 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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