$2.2bn deal for Adelaide-based ASC to sustain Collins Class submarines

A $2.2bn deal has been inked to secure 700 jobs maintaining the Adelaide-built Collins Class submarine fleet.

A $2.2bn deal to continue high-level maintenance of Australia’s Collins Class submarine fleet in Adelaide has been inked, securing more than 700 South Australian jobs.

The four-year sustainment contract for the Adelaide-built fleet of six Collins submarines continues Osborne Naval Shipyard as the home of lucrative full-cycle dockings, which take two years to complete.

Another 400 jobs will continue in Western Australia, where ASC conducts less complex maintenance near the Collins’ fleet base.

A determined WA bid to seize the full-cycle docking work, which involves cutting open the submarines and removing their diesel engines, was torpedoed in 2021.

The continued sustainment contract adds to the work at Osborne, where a Life of Type Extension (LOTE) program for the Collins will start in 2026 and employ 500 people.

700 sub jobs for SA have been secured after inking a $2.2bn deal. Picture: Supplied

Defence Industry Minister Pat Conroy said: “This new contract ensures these workers have certainty in Australia’s national naval shipbuilding and sustainment enterprise, and helps to grow the workforce required to build and sustain Australia’s future nuclear-powered submarines.”

The four-year deal is for the fifth “performance period” of the sustainment contract – the fourth, four-year period finished on June 30.

ASC, which built the six Collins Class submarines when known as the Australian Submarine Corporation, will be the joint constructor and sole maintainer of the nation’s AUKUS nuclear-powered submarine fleet under a deal inked in March.

Osborne shipyard neighbour BAE Systems Australia will be the joint builder of the submarines, as part of the $368bn program under the AUKUS security pact.

Finance Minister Katy Gallagher, whose portfolio includes the government-owned ASC, said: “Using its unrivalled knowledge of Australian submarine operating conditions, with an existing workforce and supply chain and leading-edge technology with ongoing research and development, ASC will deliver safe, high-quality sustainment services to the Royal Australian Navy.”

Collins Class submarine HMAS Dechaineux tied up in Cairns. Picture: Brendan Radke

Opposition Senate Leader Simon Birmingham, who was the minister responsible for ASC in the previous Coalition government, in April warned of a $1bn cutback to the Collins upgrade, saying the program had been slashed from $6.4bn to $4-5bn.

Mr Conroy in June confirmed plans to retrofit Tomahawk cruise missiles to the Collins fleet had been scrapped, having been rejected as neither viable nor value for money.

The full-cycle docking deal was first inked in 2003, months after the commissioning of the sixth Collins Class submarine, HMAS Rankin.

But WA in 2019 launched a bold attempt to seize the work, commissioning a study which found moving full-cycle docking there would contribute an extra $600m annually to its economy and generate thousands of jobs.

This would have required a significant expansion of ASC’s Henderson site, where mid and short-term Collins maintenance is conducted.

In September 2021, when the AUKUS deal was struck, former prime minister Scott Morrison confirmed the LOTE program would go ahead in Adelaide.

He also confirmed the full-cycle docking work would remain in Adelaide rather then being shifted to Western Australia, ending years of speculation and pressure from The Advertiser’s long-running Save Our Subs campaign.

Originally published as $2.2bn deal for Adelaide-based ASC to sustain Collins Class submarines