Taxpayers fund Rolls Royce subs plan in $4.6bn bailout for British plant
Australia will hand billions to Britain’s Rolls Royce over the next decade so it can build nuclear reactors for the navy’s AUKUS subs.
Australian taxpayers will hand $4.64bn to Britain’s Rolls-Royce over the next decade so it can build nuclear reactors for the navy’s future AUKUS submarines, matching funds provided to the US to expand its submarine industry under the trilateral pact.
The funding injection for the under-pressure British submarine sector will be announced on Friday, as Australian government submarine builder ASC is named as a joint venture partner to build the AUKUS boats with the UK’s BAE Systems.
The developments follow the signing of a new bilateral treaty on Thursday by Defence Minister Richard Marles and British counterpart Grant Shapps to streamline military co-operation and ensure the nations consult on security threats to either country.
Mr Marles and Mr Shapps will sit down with Foreign Minister Penny Wong and British Foreign Secretary David Cameron in Adelaide on Friday for the nations’ annual “2+2” AUKMIN talks.
BAE is also building Australia’s Hunter-class frigates using ASC’s former shipbuilding workforce, which it purchased for $1 under a deal brokered by the Coalition.
The government revealed last month the Hunter program had blown out by a further $20bn to $65bn. The legal structure of the new submarine joint venture is yet to be finalised.
As Australia’s “sovereign submarine partner”, ASC will also undertake sustainment of all of Australia’s future nuclear subs, commencing with promised US-made boats.
The money for Rolls-Royce will go towards the expansion of its nuclear reactor facility at Derby, in the English Midlands, and fund a proportion of a reactor redesign required for the AUKUS boats.
Australia provided an equivalent sum to help bolster US submarine production. But in a blow last week the Pentagon halved the number of submarines it intends to build next year, casting doubt over its pledge to supply Australia with second-hand Virginia-class subs in the 2030s.
The British submarine industry has suffered from years of under-investment, delaying production of its current Astute-class attack boats and future Dreadnought ballistic missile submarines.
Mr Shapps said the UK had allowed defence spending to stagnate, but was now recapitalising its submarine sector “in a big way”. “The peace dividend was taken once, twice, three, four times, and you can’t carry on doing that,” he said.
“We recognised that a number of years ago, and we’ve been increasing our defence budget.”
He said Rolls-Royce’s Derby facility would be doubled in size, and substantial funds were being poured into BAE’s submarine construction facility at Barrow-in-Furness in Cumbria.
However, Mr Shapps also confirmed the UK’s Dreadnought program was its “most significant national program, bar nothing”, which Australian naval experts have warned could delay the AUKUS build.
The last of the Dreadnought-class boats isn’t expected to be completed until the late 2030s, potentially impacting the first of Britain’s AUKUS submarines, also intended to enter service late next decade and virtually identical to Australia’s.
Retired rear admiral Peter Briggs warned recently that Britain’s AUKUS boats, intended to get under way well before Australia’s to reduce program risk, would be “in a queue behind the higher-priority Dreadnought and Astute programs”.
Mr Marles said Australia was supporting the “stretched” industrial bases in both the US and UK to ensure the AUKUS deal was a success.
He said the Rolls-Royce facility was key to the program, declaring “we are making a contribution to the factory which will build them”.
Mr Marles said Australia faced a “challenging time frame” to meet its scheduled launch of the first Adelaide-built AUKUS submarine in the early 2040s, “but we’re confident that we will get there”.
New training pilot programs will be launched under the joint venture to expand the enterprise’s technical workforce.
More Coverage
Tech disrupter offers low-cost missiles to ADF
The US tech company developing Australia’s Ghost Shark underwater drone is pitching new missiles that cost less than half the price of those produced by big arms manufacturers.
‘Great disappointment’ as Australia abstains on controversial UN Israel vote
Penny Wong says Australia wanted to back the motion — drafted by the Palestinian Authority — demanding Israel’s withdrawal from Gaza and the West Bank, and sanctions against the Jewish state, but failed to have amendments inserted.