Australia has announced a major investment in naval infrastructure, allocating billions of dollars for the construction of docks, shipyards, and factories both domestically and in Britain. This decision comes as BAE Systems secures the contract to assist in building submarines as part of the AUKUS security pact.

Under the AUKUS agreement involving Australia, Britain, and the United States, Australia will procure up to five nuclear submarines from the US in the early 2030s. Subsequently, a new class of submarines, SSN-AUKUS, will be jointly developed and operated with Britain approximately ten years later.

This agreement, which marks Australia as the seventh nation to possess nuclear-powered submarines, will place additional strain on shipyards in Britain and the United States, already facing challenges of delays and budget overruns.

To mitigate these challenges, Australia has pledged 2.4 billion pounds ($3.1 billion) to support design work on the conventionally armed SSN-AUKUS submarines and the expansion of a Rolls-Royce plant that manufactures nuclear submarine reactors in Britain.

Additionally, Australia has committed $3 billion to US shipyards, where it plans to purchase Virginia-class nuclear submarines in the early 2030s. This investment aims to address concerns about potential order backlogs jeopardizing the procurement deal.

Defence Minister Richard Marles highlighted the opportunities for Australian industry presented by AUKUS, emphasizing the collaboration with UK and US partners.

Furthermore, Australia will invest A$1.5 billion ($993 million) to prepare a naval base in Western Australia for hosting nuclear submarines, including those from the US and Britain expected to be stationed there part of each year from 2027 onwards. The total cost of these infrastructure developments is estimated to be around A$8 billion.

The official launch of these investments will take place on Friday, with Australian and British foreign and defence ministers holding a joint news conference at shipyards in South Australia, where the AUKUS fleet will be constructed.

BAE Systems has been chosen to lead the construction of submarines in South Australia, in partnership with local naval company ASC. Construction is scheduled to commence in the late 2020s, following the completion of at least A$2 billion worth of new shipbuilding facilities.

Once the submarines are operational, ASC will be responsible for maintenance and logistics, collaborating with unspecified US and British firms. BAE Systems had previously secured a £4 billion ($5.1 billion) contract in October 2023 to commence design work and infrastructure development at the shipyard in Barrow-in-Furness, Britain.

Given the specialized workforce required for nuclear submarine construction, BAE Systems and ASC will establish a joint skills center in South Australia to train workers. Australia plans to send approximately 100 ASC employees to Pearl Harbor, Hawaii, next year for training at a US naval facility.

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