Government accused of hiding ‘lazy $591 million’ in extra costs from scrapped French submarine program
ABC, By defence correspondent Andrew Greene, 8 Nov 2022
Details of up to $591 million in additional expenses for the cancelled French submarine program have emerged, including asset writedowns on unused infrastructure and re-employment programs in Adelaide.
Key points:
- The extra costs to taxpayers only came to light in a late-night hearing
- $470 million has been spent on a South Australian facility which will have to be partially bulldozed
- A talent pool program costing $28 million has secured 223 jobs
The extra costs to taxpayers were revealed by officials from the government-controlled enterprises Australian Naval Infrastructure (ANI) and Australian Submarine Corporation (ASC) during a late-night Senate estimates hearing on Monday.
Last year the Morrison government cancelled the $90 billion Attack-class submarine program with French company Naval Group, in favour of nuclear-powered boats under the AUKUS partnership.
Earlier this year the Albanese government agreed to an $830 million compensation payment to Naval Group for the scrapped project, but more than half a billion dollars in other costs has now emerged in parliament.
In Senate estimates ANI confirmed a $300 million asset writedown related to the Osborne North Development project, a naval yard constructed for the now scrapped French designed Future Submarine project.
The committee was told $470 million has been spent to date on the Osborne North facility, including some assets which could still be repurposed for the new nuclear submarine program.
However ANI CEO Andrew Seaton told Greens senator David Shoebridge a partly-built “platform land-based test facility” which had been designed for the French submarines would probably now have to be bulldozed.
Separately the head of ASC also revealed that the cost of rehiring workers from the scrapped French submarine program is expected to reach $291 million over three years, but may be extended by the Defence department.
Since beginning six months ago, the Sovereign Shipbuilding Talent Pool (SSTP) has cost $28 million, with 223 workers hired by ASC following the scrapping of the French submarine program………………
Senator Shoebridge said the additional costs had been “ferreted away off the Defence budget”, but the public was paying the price for the scrapped submarine project.
“Only in a bungled multi-billion Defence project would a government even try to hide a lazy $591 million in additional costs,” he said.
“When we pay an extra $591 million for not building submarines we lose those funds for public housing, schools or income relief.
“While there are strategic arguments for retaining skilled staff, the fact that the ASC contract costs $1.3 million for every job is astounding.” https://www.abc.net.au/news/2022-11-08/591-million-most-in-costs-scrapped-french-submarines-australia/101629310
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