Cost of Australia’s sunk French submarines deal revealed

The final cost of the former Prime Minister’s defunct submarine deal has been revealed – and there’s been a steep jump.

The cost of unwinding former PM Malcolm Turnbull’s French submarine deal has been revealed, with half-a-billion taxpayer dollars to be sunk next year.

Federal budget papers show an extra $494m will be spent on top of the $3.2bn already lost on the program, despite it being canned six months ago.

The total figure of nearly $3.7bn is vastly higher than the $2.4bn senior Defence officials had been telling parliamentary committees as recently as last month.

There were suggestions on Wednesday night the increased costs could be for the new Nuclear-Powered Submarine Taskforce and the talent pool set up to find sacked Naval Group workers new jobs in shipbuilding.

Budget papers say the money is being spent on “transitioning out of arrangements for the Attack-class submarine program in accordance with relevant contractual obligations”.

“Budget has remained as programmed with a variation associated with foreign exchange movements until costs associated with termination and transition out of contractual arrangements are identified.”

Former prime minister Malcolm Turnbull. Picture: Bianca De Marchi

At a Senate Estimates hearing last month, senior Defence official Tony Dalton said negotiations over the settlement to terminate the French project was “ongoing”.

The federal government continues to untangle the complex contract, which was signed by Mr Turnbull in 2016.

He decided to pursue the $90bn deal with French shipbuilders Naval Group, building diesel-electric submarines instead of vastly superior nuclear-powered vessels in 2016.

The decision infuriated close ally Japan, who predecessor Tony Abbott had wanted to work with to acquire conventional Soryu-class submarines.

During the bidding war for the contract, Naval Group – then called DCNS – made it clear nuclear versions of their Barracuda-class attack submarines were on offer, albeit in 2050.

“If, in 2050, Australia wants a nuclear submarine, they can design a nuclear submarine,” then chief executive Herve Guillou said.

Last September, Scott Morrison tore up the French contract in favour of a fleet of at least eight nuclear-powered submarines to be built in Adelaide under the AUKUS security pact with the US and Britain.

Deputy Secretary National Naval Shipbuilding, Tony Dalton said: “The transition out of those contracts are sensitive negotiations. You’ll understand that we don’t want to talk about how that might play out in terms of dollar figures.” The Prime Minister said nuclear submarines were “not an option” when Mr Turnbull inked the Attack-class deal.