State and federal governments are yet to reach a final land swap deal at Osborne shipyard

The federal government is still waiting on South Australia to hand over crucial land surrounding the Osborne shipyard that would unlock a major expansion.

The federal government is still waiting on South Australia to hand over crucial land surrounding the Osborne shipyard that would unlock a major expansion for the construction of nuclear-powered submarines.

Despite signing a co-operation agreement with the Commonwealth in March, it’s been revealed the two governments are still yet to reach a final deal to complete the land swap.

The agreement would allow the state government to seize the historic Keswick Army Barracks – prime real estate on the CBD fringe – in exchange for barren land surrounding the Osborne shipyard.

Nuclear-powered Submarine Taskforce chief, Vice Admiral Jonathan Mead, issued a veiled warning to the state government over the progress of the deal.

“One of the things we need to do very quickly is get boots on the ground so I can start building the yard and then building submarines down there,” Vice Admiral Mead said.

“The land is also needed for the new Skills and Training Academy campus.”

Vice Admiral Jonathan Mead said the extra land at Osborne must be acquired by the Commonwealth as quickly as possible.

The Osborne shipyard is expected to triple in size as a new nuclear submarine construction precinct is developed just north of the existing site.

It will become the fourth submarine production line within the AUKUS security pact, joining Newport and Groton in the US and Barrow-in-Furness in the UK.

The Advertiser understands Defence officials are eager to have the land in Commonwealth hands by July 1, otherwise there will be risks of delays to the program.

A spokesman for Premier Peter Malinauskas said: “The South Australian government sees great value in the prospect of a land swap, and is working closely and cooperatively with Defence to facilitate this as quickly as possible”.

A spokesman for Premier Peter Malinauskas said the state government was “working closely and cooperatively with Defence” to finalise the deal “as quickly as possible”.

Digital impressions of the future nuclear-powered submarine Osborne shipyard. Picture: Supplied by federal government

The state government will acquire the Keswick Army Barracks as part of the deal, unlocking major potential for high-density housing development.

It will also gain ownership of Defence land at Cultana on the Eyre Peninsula, which would be used as part of Mr Malinauskas’s plans to establish a hydrogen hub at Port Bonython.

When the co-operation agreement was unveiled in March, Defence Minister Richard Marles emphasised the federal government’s intent to build the new shipyard “immediately”.

State government and Defence sources were confident the government agencies involved would iron out the details of the deal in time.

Vice Admiral Mead gave a grim warning on the pace of China’s proficient military growth, which has created greater urgency to deliver a “pre-eminent warfighting capability”.

“In the year 2000 (China) had six nuclear-powered submarines and by the end of this decade they will have more than 20,” he told News Corp Australia.

“(Also) in the year 2000, they had 57 surface ships, and by the end of this decade that is expected to approach around 200.”