How much does a nuclear submarine cost?
As the new ‘AUKUS’ alliance to build Australia a fleet of nuclear-powered submarines battles growing criticism, a key question has emerged: how much do nuclear submarines actually cost?
Before we get to that, what’s a nuclear submarine? It’s not considered a nuclear weapon, first of all. It all comes down to how it’s powered; a nuclear submarine works from its own miniature nuclear reactor, whereas conventional submarines use diesel-electric engines.
In terms of how much they’ll cost, not even the Federal Finance Minister knows.
“Finalisation of those costs is something that will be assessed in [that] 12-18 month process we’re now embarking on with the UK and the US,” Finance Minister Simon Birmingham told ABC Radio National when asked about how much building the submarines would cost.
“The Prime Minister has acknowledged that it will likely cost more than what we had assessed for the conventionally powered submarines.”
The world spends $2 trillion on defence: How does Australia compare?
'MAJOR STEP': Australia's groundbreaking move to counter China
'Always': Scott Morrison responds to Biden's awkward 'brain fart'
Before the new AUKUS deal, Australia had a $90 billion contract with France to build 12 conventional submarines. To make way for the new defence pact, that deal has now been scrapped.
Opposition Leader Anthony Albanese has taken aim at the question marks around what this will cost Australian taxpayers.
“We know there are contracts in place already that will be breached. And we know there will be substantial compensation costs payable,” Albanese said. These ‘walk-away’ costs are estimated to be in the hundreds of millions.
“And Australian taxpayers are entitled to know, given that under this Government they began with arrangements with Japan, then arrangements with France, and now we have these arrangements with the United States and potentially the UK as well.”
What DO we know about the nuclear submarine deal and the costs so far?
The new ‘AUKUS’ partnership will see Australia acquire a fleet of “at least eight” nuclear-powered submarines to “protect our national security interests” and “work with our partners across the region to achieve the stability and security of our region”, in Prime Minister Scott Morrison’s words.
In other words, but not directly said, the alliance will put Australia in a better position as a maritime rival to China.
We also know that Morrison intends to build these in South Australia, keeping jobs local.
But the new AUKUS deal means that we’ve torn up a $90 billion contract with France’s Naval Group to build 12 “Attack class” submarines, infuriating France along the way.
French Foreign Minister Jean-Yves Le Drian told local radio of his “total incomprehension” at the move to tear up the $90 billion contract.
“It was really a stab in the back. We built a relationship of trust with Australia, and this trust was betrayed,” Le Drian said.
We also know that Australia has spent more than $2 billion already on that deal, though Morrison defended it as having been a “good investment for Australia’s capability”.
“We've invested $2.4 billion in the Attack class programme, and I say all of that investment, I believe, is further building our capability,” Morrison said on Thursday.
How much nuclear submarines cost around the world
The US Navy’s latest submarine model, the Virgina-class submarine, claims to have the latest tech in stealth, intelligence gathering and weapons system tech.
According to documents prepared for the US Congress, procuring a Virgina-class submarine is estimated to cost US$3.45 billion, or AU$4.73 billion, per boat.
Australia doesn’t currently have a domestic nuclear industry. SA Senator Rex Patrick told Yahoo Finance he expects each submarine will cost at least $5 billion to build.
Australian National University research fellow and nuclear science expert AJ Mitchell said there would be an “eye-watering cost” to constructing these high-tech watercrafts.
“Each nuclear submarine typically costs several billion dollars to build, and requires a highly skilled workforce with expertise in nuclear science,” Mitchell wrote in a new piece for The Conversation.
He does believe that we’ll have the capability to build them, though sourcing the fuel would be an issue.
“Australia is well situated to meet the increasing demands in this space, and will also benefit from existing UK and US expertise through the new trilateral security pact.”
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.