AUKUS: BAE Systems wins $7.6 billion submarine deal, Australia nowhere to be seen

A $7.6 billion contract has been awarded to British military manufacturers to design and develop a new nuclear-powered hunter-killer submarine as part of the AUKUS (Australia-United Kingdom-United States) pact with Australia.

The UK Ministry of Defense (MoD) has signed a deal for a detailed design study to examine the potential future threats and requirements the submarine will face and what technology will be needed to address these.

“This multi-billion-pound investment in the AUKUS submarine program will help deliver the long-term hunter-killer submarine capabilities the UK needs to maintain our strategic advantage and secure our leading place in a contested global order,” UK Defence Secretary Grant Shapps told a Conservative Party conference in Manchester yesterday.

Australia and the UK agreed in March that they would both operate the new design incorporating technology from the United States.

But Australia is nowhere to be seen in this crucial design and development phase.

And the primary beneficiary of the contract, BAE Systems, was last month referred to the Australian National Anti-Corruption Commission (NACC) over irregularities within a $46 billion Defence Department deal to buy a new generation of frigate from the manufacturer.

The design has received widespread criticism for being overweight, underarmed and overpriced.

Britain’s largest military-industrial firm began early design work for a replacement UK sub in 2021. The new contract will expand and accelerate that work to a point where it can place early contracts for time-intensive components such as nuclear reactors.

The money will also go towards “significant infrastructure investment” at BAE Systems’ site in the UK’s Barrow-in-Furness, securing a component supply chain, and recruiting more than 5000 specialist workers. Britain’s Rolls Royce, which builds compact reactors, and shipbuilder Babcock Marine are also recipients of the funding.

The British MoD says the first vessel will be delivered to the Royal Navy in the late 2030s. Under that schedule, the first SSN-AUKUS submarine will be delivered to Australia in the early 2040s.

Diplomatic dance

Beijing’s Communist Party-controlled media has been attacking the AUKUS technology-sharing deal since it was announced.

China, which is undergoing the largest naval expansion seen since before World War II, rejects the need for Australia to acquire the silent, long-endurance vessels.

“When considering what Australia has gained from this, I would say nothing and less than nothing. In fact, the worst consequence of this is that it will deprive Australia of its sovereignty,” Chinese academic Victor Gao asserts in a recent Global Times editorial.

“It does not add any value to Australia, nor does it increase the US’ obligation to defend Australia’s fundamental interests in times of conflict,” he states. “Instead, it has the potential to spark an arms race.”

The editorial touches on a sore subject.

A key US House Armed Services Committee member has admitted laws restricting technology sharing with allies are still holding back AUKUS cooperative projects.

Under existing laws, “we have to treat Canada better than Australia,” Representative Rob Wittman told a Center for Strategic and International Studies (CSIS) conference last week.

He said a “higher level of trust” was still needed among the “five eyes” intelligence-sharing partners – Australia, New Zealand, Canada, the United Kingdom and the United States.

Meanwhile, the Pentagon’s chief of defence acquisitions Bill LaPlante has pointed to the 1960s-era Polaris Agreement with the UK as a successful model which should serve as a model for the AUKUS pact.

Polaris was a program where the US shared advanced nuclear submarine and ballistic missile technology with the UK to accelerate its nuclear deterrence program.

“Since then, the missile compartments of the SSBNs – the UK and the US – are identical. When you walk into one on a Vanguard-class submarine, you’re walking into a trident missile compartment. The data – with the exception of perhaps a very sensitive part of the physics package – everything else is shared,” he told the Maritime Security Dialogue last week.

“That is a model of what we have to do, I believe, in AUKUS,” he added. “And it’s got to be set up at that level. And I think that we have the political will to do it.”

Capability, capacity, competence

Canberra is expected to buy between three and five second-hand Virginia-class attack submarines from the United States over the next two decades to fill a dangerous capability gap. Over the past two decades, federal government inaction has left Australia’s ageing Collins-class diesel-electric submarines operating far beyond their design life.

In August, a deadly fire aboard one of Australia’s oldest operational submarines, HMAS Farncombe, is believed to have been caused by degraded electrical systems.

The AUKUS announcement by former Prime Minister Scott Morrison came as a surprise and abruptly ended a troubled multibillion-dollar deal with France to convert one of its nuclear submarine designs into a diesel-electric powered vessel for Australia.

Since then, the US has repeatedly raised doubts that it has enough of its own submarine-building capability to sustain its own fleet – let alone replace any operational vessels sold to Australia.

Last year, Canberra invested up to $1 billion in US shipyards to show its support.

The British MoD announcement does not reference joint funding with Canberra, investment in Australian infrastructure or Australia’s involvement in the submarine’s design.

Earlier this year, Canberra committed to a $2 billion expansion of Australia’s shipbuilding facility at Osborne, Adelaide. But a further $4 billion must be spent to get the facility – and its employees – up to a level capable of assembling the remaining eight nuclear submarines planned under a yet-to-be-determined joint construction deal with the UK.

Royal Australian Navy Vice Admiral Mark Hammond told the US Naval Institute last month that Australia’s greatest challenge was establishing a suitable skills base.

“My biggest challenge is probably the workforce to enable this to transform from completely conventional submarine force to nuclear power … which needs to be a bit bigger than what we’ve got,” Hammond said.

The RAN has already begun sending officers and engineers to the US and UK to gain experience working with nuclear reactors.

“The professional journey that we’re on is about lifting our skills around nuclear power. The rest of the submarine piece we’re pretty much good on … The big lift is making sure that we can manage and steward the nuclear ocean piece. You can’t fake that you’ve got to earn the trust.”

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