AUKUS sub deal comes with hefty price tag for Australians — Analysis

The submarine deal, which forms part of the AUKUS pact, might come at a high price for Australians, one of the country’s think tanks revealed in a fresh report that estimates the project’s ultimate cost at up to US$121 billion.

The agreement that already saw Canberra ditching its US$90 billion diesel-electric submarine contract with France in favor of new partners – the US and the UK – might now hit the Australian taxpayers’ pockets as well, the Australian Strategic Policy Institute (ASPI) warned in a report published on Tuesday.

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Australia still has not decided on the specific submarine designs that it desires and whether to partner with the US to construct them. This was stated by Scott Morrison in September as Prime Minister. “through the rather significant and comprehensive program assessment”Over the next 12-18 months.

ASPI acknowledged that “any cost estimation is an extremely assumption-rich activity”This stage is critical because many parameters are yet to be agreed upon. However, the think tank still calculated the deal’s total costs under a set of various scenarios.

Canberra could choose to buy a few smaller subs or build their own. “in the most efficient manner possible,”In constant price, the costs would be between AU$70 trillion (US$49.86 trillion) and AU$78 miliarde (US$55.55 million). Inflation will cause this price to rise between AU$116 trillion (US$82.62 million) and AU$129illion (US$91.88 millions).

If the Australian government goes with a more expensive ‘continuous build’ approach and prefers larger underwater crafts, the costs might increase to between AU$77 billion (US$55.55 billion) and AU$78 billion (US$61.96 billion) or AU$153 billion (US$108.97 billion) to AU$171 billion (US$121.79 billion) in out-turn prices.

ASPI is confident that this project will succeed. “a massive undertaking and probably the largest and most complex endeavor Australia has embarked upon” while some local media reported that it is about to cut a major slice off Australia’s GDP.

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The think tank’s analysts also believe that picking a partner for the project might be even more important than just determining the submarine design. The US produces submarine crafts 10 times quicker than the UK. According to Australian media, the British submarine program could begin before the decade is over, but America may not build the vessels until 2030.

“Who has the capacity to ramp up to help us? The UK must double its production if we need one every three year. The issue is which partner has the capacity to help us get there,” one of the report’s co-authors, Dr. Marcus Hellyer, told the Guardian Australia. He added that a collaborative approach that would let Australia’s industry be part of the project as well could save Canberra much time.

“That could make a huge difference to the schedule. It could aim for the early 2030s instead of the late 2030s or even early 2040s,”Hellyer added. The ASPI warns, though, that Australia’s existing six Collins-class submarines might retire well before the new underwater crafts become fully operational.

“It’s likely to be at least two decades and tens of billions of dollars in sunk costs before Australia has a useful nuclear-powered military capability,”According to the report, it also stated that “we may have already reached the point at which it’s impossible to avoid a serious and potentially enduring decrease in submarine capability.”



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