Australia commits $2.7bn to advance AUKUS submarine shipyard

Australia will invest A$3.9 billion ($2.76 billion) to advance construction of a shipyard critical to delivering nuclear-powered submarines under the trilateral AUKUS defence pact with the United States and Britain, Prime Minister Anthony Albanese announced on Sunday.

The funding will support development of the new submarine construction yard at Osborne in Adelaide, South Australia. Albanese described the allocation as a down payment toward the project, which is central to Australia’s plan to acquire conventionally armed, nuclear-powered submarines.

Launched in 2021, AUKUS represents Australia’s largest-ever defence investment. Under the agreement, US Virginia-class submarines will be rotationally deployed to Australia from 2027, with several vessels expected to be sold to Canberra from around 2030. Britain and Australia will also jointly develop and build a new class of AUKUS submarines later in the decade.

The total cost of building the new submarine fleet and supporting infrastructure is projected at about A$30 billion over coming decades, according to official estimates.

The Osborne site, where Australia’s ASC and Britain’s BAE Systems will collaborate on submarine construction, currently handles much of the maintenance for Australia’s Collins-class submarines. South Australian Premier Peter Malinauskas said the initial funding would go toward enabling infrastructure for the yard, calling it only the beginning of the long-term project.

A Pentagon review in December highlighted opportunities to strengthen the AUKUS programme, including ensuring Australia moves quickly enough to develop its nuclear submarine capabilities.