Australia will compensate France by this summer

by time news

Termination of the contract for 12 submarines will cost Canberra 3.7 billion euros. This sum covers the reimbursement of the costs of Naval Group, Lockheed Martin, subcontractors and the shipyard.

A month and a half before the legislative elections in Australia, the affair of the brutal cancellation, on September 15, of the contract of the century in the submarines ordered from France, rebounds. The termination of the contract will cost the public finances dearly, accuse the elected representatives of the opposition to the government led by Prime Minister Scott Morrison.

«Taxpayers will have to shell out $5.5 billion (i.e., 3.7 billion euros) for submarines that don’t exist? “, challenged Senator Penny Wong, during a hearing with Tony Dalton, Deputy Secretary at the Ministry of Defense. ” The final negotiated settlement will be within this price “, he admitted.

SEE ALSO – Australia cancels its contract with France to build nuclear submarines with Washington and London

375 SMEs and ETIs including 35 French

Australia had canceled, without notice, the order for 12 conventionally powered ocean-going submarines, derived from the French Barracuda, supplied by Naval Group, for the benefit of a security agreement, baptized Aukus, with the United States and the United Kingdom, along with the acquisition of nuclear-powered submarines. This terminationfor convenience», according to the legal term, was provided for in the contract. It gives rise to the reimbursement of incurred and future costs, linked to the physical “demobilization” of IT infrastructures and systems as well as the reclassification of Naval Group employees and the 375 subcontractor SMEs and ETIs, including 35 French women who had installed in Australia under the program.

Naval Group is negotiating the reimbursement amount with Canberra. Discussions thattake place in a constructive atmosphere”, from sources close to the European leader in the naval military, should be completed by the end of June, the date of the end of the Australian fiscal year.

Compensate Lockheed Martin

But Naval Group will not pocket 3.7 billion in compensation. “This amount covers all of Canberra’s expenses since 2016 and the award of the contract. These are the salaries of officials working on the file, the costs of Naval Group and Lockheed Martin, in charge of the submarine combat system, and their subcontractors and finally those of the local public company in charge of shipyard construction“, Details this same source. “Australia’s reimbursement to Naval Group will therefore not involve billions!“, we are assured from a source close to the European leader in the military naval sector.

Naval Group indicated in September that it had achieved 840 million in turnover, with the Australian program since 2016. Since then, the group has undertaken to “unravel” everything it had put in place to pilot the program: repatriate its French employees installed in Australia and vice versa, return a building intended to accommodate the Australian teams in Cherbourg, the industrial headquarters of the group’s submarines, cut off the computer networks, but also lay off its Australian employees who had joined its local subsidiary. “200 have already been made redundant out of 300“, we specify.


SEE ALSO – Submarines: according to his predecessor, the Australian Prime Minister “duped” France

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