Submarine fleet tipped to cost $225b to build and maintain

Australia’s new fleet of attack submarines is now estimated to cost about $225 billion to build and maintain, according to Defence officials.

The cost of building the 12 French-designed submarines has crept up from an expected $50 billion three years ago. The head of the Navy’s submarine program, Greg Sammut, told a Senate estimates hearing on Friday the “out-turn cost” – the actual cost of the build calculated at the end of the project – was now estimated to be at least $80 billion.

This was on top of the cost to “sustain, update and upgrade” the submarines until 2080, which was estimated to total $145 billion when adjusted for inflation.

Rear-Admiral Sammut also confirmed the construction start date would not be until 2024, with the previously quoted 2022-23 kick-off applying to the qualification of the personnel, tools and the processes for the build of the pressure hull of the submarine. Labor seized on the updated figures to claim the schedule had blown out by another year and was over budget.

The Department of Defence maintains using the “constant cost” – which doesn’t take inflation into account – is a better way of comparing estimates with actual costs. A Defence spokeswoman said the figures outlined in the estimates hearing “do not represent a change in the estimated cost” of the submarine fleet. Australian Strategic Policy Institute senior analyst Marcus Hellyer, who had previously estimated construction would cost $79 billion, said the total price of the future submarine program was not surprising.

“Submarines are currently our most expensive capability to sustain – around $600 million per year,” Dr Hellyer said.

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