Australia, France Sign DCNS Submarines Deal

By MarEx 2016-12-22 04:33:25

Australia and France formally sealed an agreement on Tuesday under which French naval contractor DCNS will build a new fleet of submarines, a deal worth A$50 billion ($36.3 billion).

Australia selected DCNS in April as its preferred bidder to build its fleet of 12 submarines, ahead of other offers from Japan and Germany. The deal signed on Tuesday finalizes one of the world's most lucrative defense contracts.

"This is a critically important step in the development of our security, in the assurance of our government in delivering Australians the security and prosperity that they need," Australian Prime Minister Malcolm Turnbull said.

Australia's new fleet of submarines is the centerpiece of its defense strategy unveiled in February, which called for an increase in military spending of nearly A$30 billion over the next 10 years to protect strategic and trade interests in the Asia-Pacific region.

“Underpinning Australia’s long-term partnership with French company DCNS for the design and build of Australia’s future submarines, the agreement also recognizes the importance of maximizing Australian industry involvement in the Future Submarine Program, including through deepening partnerships between Australian and French defense suppliers,” said Australia’s Minister for Defence, Marise Payne. “This will drive innovation, jobs and economic growth right across Australia.”

“DCNS’s vision is to deliver a regionally superior submarine for Australia’s sovereign operation and sustainment and maximize local industry participation,” said Sean Costello, Chief Executive Officer, DCNS Australia, recently. “In order to achieve this, we will build a supply chain in Australia that has the in-country capability to deliver the products, services and know-how to keep the submarines capable and available on an enduring basis.”

Australia rejected offers from Japan's Mitsubishi Heavy Industries and Kawasaki Heavy Industries, and Germany's ThyssenKrupp AG when selecting DCNS.

Earlier this year, DCNS was left reeling after details from more than 22,000 pages of documents relating to submarines it is building for India were published in The Australian newspaper, leading to concerns about the company's ability to protect sensitive data.

Australian government ministers said they were certain of maintaining the security of the new submarine fleet.

"We are continuing to invest in cyber security, which is a major part of warfare into the future," Defense Industry Minister Christopher Pyne said.