CANBERRA, AAP – Negotiations with a French company following Australia pulling out of a submarine deal are likely to extend well into the next financial year, according to the defence minister.
Peter Dutton on Monday conceded talks with Naval Group about compensation costs for scrapping the previous $90 billion submarine deal would continue for several months.
The submarine deal with the French company was scrapped in 2021 in favour of nuclear-powered vessels as part of the AUKUS security pact.
It was originally hoped the settlement between Australia and Naval Group would be finished by the end of the current financial year.
However, Mr Dutton said it would most likely carry on into the next financial year.
Top Australian Brokers
- eToro - Social and copy trading platform - Read our review
- IC Markets - Experienced and highly regulated - Read our review
- Pepperstone - Trading education - Read our review
“It will be after the election, it’ll take some time,” Mr Dutton told reporters.
“The negotiations are under way at the moment, so once those figures have been settled, then we will provide that information.”
Earlier this year, a Senate estimates hearing was told termination costs as part of the previous submarine deal could be more than $5.5 billion.
Taxpayers have already been slugged more than $2.5 billion for Australia pulling out of the deal.
Mr Dutton said he did not want to state the figure that was being negotiated with Naval Group.
“What happens in a commercial negotiation is if the other side knows that you’ve got a hard deadline, then they’ll hold you over a barrel,” he said.
The defence minister on Monday announced a $381 million upgrade to the existing Collins class of submarines in South Australia.
The upgrade would see the Collins class fleet upgraded with new camera systems.
