(Bloomberg) -- Australia has signed a $1.4 billion (A$2.2 billion) deal with ASC Pty Ltd to upgrade its Collins class submarines while the country waits for delivery of nuclear-powered vessels as part of the Aukus agreement.
The four-year deal with the state-owned defense contractor follows the announcement of the government’s so-called life-of-type extension program for the submarines that will kick off in 2026 with the HMAS Farncomb, the government said in a statement.
The government in June committed between A$4 billion and A$5 billion to upgrade the six Collins class submarines, which were commissioned between 1996 and 2003.
The arrangement will support around 1,100 workers in Osborne, South Australia and Henderson, Western Australia, in a move the government said would support local expertise as the country gears up for a fleet of nuclear-powered submarines.
“This new contract further ensures these workers have certainty in Australia’s national naval shipbuilding and sustainment enterprise,” Pat Conroy, Minister for Defence Industry, said in a statement. The arrangement also “helps to grow the workforce required to build and sustain Australia’s future nuclear-powered submarines,” he added.
Australia is due to receive its first US-made Virginia class nuclear-powered submarines sometime after 2032. However, US efforts to refresh its own fleet are running years behind schedule, raising the specter of potential delays.
In March, Canberra also outlined plans for the SSN-AUKUS class of nuclear-powered submarines to be built by ASC and UK defense contractor BAE Systems Plc. At the time, Conroy described the construction of the submarines as “the greatest industrial endeavor Australia has ever attempted, both in scale and technical complexity.”
Canberra’s efforts to refresh its aging fleet of Collins class diesel-electric submarines has a checkered history. The 2021 Aukus deal, a trilateral security partnership between Australia, the UK and the US in which nuclear-powered submarines were key, led to Australia canceling a contract with a French contractor to build new diesel-powered vessels, triggering a diplomatic rift between Canberra and Paris.
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