How much does a nuclear submarine cost?

·4-min read
Image of the Virginia-class attack submarine USS California (SSN 781) underway during sea trials in the Atlantic Ocean, June 30 2011.
June 2011: The Virginia-class attack submarine USS California (SSN 781) underway during sea trials. (Source: Getty)

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.”

CANBERRA, AUSTRALIA - MAY 13: Minister for Finance Simon Birmingham holds a press conference in the Senate Courtyard at Parliament House on May 13, 2021 in Canberra, Australia. Labor leader Anthony Albanese will tonight respond to the Morrison government's third budget, handed down on Tuesday, which has an increased focus on women, with almost $354 million in funding allocated for women's health. Treasurer Josh Frydenberg also outlined more than $10 billion in spending on major infrastructure projects across Australia aimed to help create local jobs and boost productivity in the COVID-affected national economy. Aged care will receive more than $10 billion over the next four years, in direct response to the findings of the Royal Commission into Aged Care Quality and Safety. (Photo by Sam Mooy/Getty Images)
Minister for Finance Simon Birmingham doesn't know how much building nuclear submarines will cost Australia. (Photo by Sam Mooy/Getty Images)

Read more:

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.

WASHINGTON, DC - SEPTEMBER 15: President Joe Biden delivers remarks about a national security initiative to announce that the United Staters will share nuclear submarine technology with Australia from the East Room of the White House Complex as he is joined virtually by Prime Minister Scott Morrison of Australia and Prime Minister Boris Johnson of the United Kingdom, on Wednesday, Sept. 15, 2021 in Washington, DC.  (Kent Nishimura / Los Angeles Times via Getty Images)
President Joe Biden announces the US will share nuclear submarine technology with Australia. (Kent Nishimura / Los Angeles Times via Getty Images)

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.

An image of the US' Virginia-Class Attack Submarine, from 2014.
An image of the US' Virginia-Class Attack Submarine, from 2014. (Source: US Congressional Research Service)

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.”

–with AP

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.