AUKUS nuclear submarine cost includes a 50% reserve for unanticipated overruns. After a study indicated that the projection was off, Australia’s defense minister stated the government was being “upfront and transparent” about the cost of the AUKUS nuclear submarine program. A 50% contingency reserve costs $368 billion.
The Parliamentary Budget Office research, commissioned by the Greens, found “huge” project uncertainty.
In March, U.S. President Joe Biden, Australian Prime Minister Anthony Albanese, and British Prime Minister Rishi Sunak announced a proposal to give Australia nuclear-powered attack submarines to oppose China’s Indo-Pacific aspirations.
The U.S. will sell Australia three General Dynamics-built Virginia-class nuclear-powered submarines in the early 2030s, with an option for two more.
Australia will get its first AUKUS-class submarine in the early 2040s. BAE Systems and Rolls-Royce will build the ships.
Australia’s Parliamentary Budget Office estimates a A$123 billion contingency over 30 years. However, due to delays, budget overruns, and other circumstances, contingencies are unknown costs.
In a statement, Greens Senator David Shoebridge called the contingency fund “unprecedented” and noted “the huge level of uncertainty in the AUKUS submarine deal.”
Defence Minister Richard Marles said the plan to build a nuclear-powered submarine in Australia by the early 2040s was a “massive challenge for the country,” The government was “prudently budgeting here for the unexpected.”
“We’ve tried to be upfront and transparent,” he told ABC radio.
The budget office stated that the Department of Defence did not initially price the U.S. Virginia Class submarines Australia would buy.
The analysis revealed the submarine program will cost the most in the two decades from 2033.
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