Download
French submarine builder to send Australia $66bn invoice for scrapped deal
Catherine Newman
Emmanuel Macron, seen here onboard a Naval Group submarine, ordered the ambassador to Australia to return to Paris after it ditched the French ship builder./Ludovic Marin/AP

Emmanuel Macron, seen here onboard a Naval Group submarine, ordered the ambassador to Australia to return to Paris after it ditched the French ship builder./Ludovic Marin/AP

 

France's Naval Group said on Wednesday that it will send a "detailed and calculated proposal" to Australia in the coming weeks of the costs it expects Canberra to pay for scrapping a massive contract to purchase French submarines.

In 2016, Australia agreed to buy 12 diesel-powered submarines built by Naval Group in a deal praised in local media as the "contract of the century" and worth 56 billion euros ($66bn). Despite all the hype, Australia ditched the deal last week in favor of nuclear-powered submarines from the U.S. and Britain, which infuriated Paris and has since sparked a diplomatic row.

 

France's defense ministry has said talks are already under way between Naval Group and Canberra. Pierre Eric Pommellet, Naval Group CEO told France's Le Figaro newspaper on Wednesday that a bill would be sent to Australia "in a few weeks." 

"Australia terminated the contract for convenience, which means that we are not at fault," Pommellet added. "It is a case that is planned for in the contract and will require a payment of our costs that were incurred and those to come, linked to demobilization of infrastructure and IT as well as the redeployment of employees.

"We will assert our rights. This decision was announced to us [France] without any prior notice, with unprecedented brutality." 

 

France's President Emmanuel Macron and Australia's former Prime Minister Malcolm Turnbull stand on the deck of HMAS Waller, a Collins-class submarine operated by the Royal Australian Navy. /Brendan Esposito/Pool/AFP

France's President Emmanuel Macron and Australia's former Prime Minister Malcolm Turnbull stand on the deck of HMAS Waller, a Collins-class submarine operated by the Royal Australian Navy. /Brendan Esposito/Pool/AFP

 

Previously, Australia had complained that the deal with Naval Group, which is partly owned by the French state, was years behind schedule and over budget. 

Naval Group had already completed $1.1 billion in work on the submarines, the ministry said, but suffered no losses as the work was covered by payments from Australia. Referring to the pullout as "a betrayal," the defense ministry said the talks would now determine the size of compensation and damages owed by Australia. 

On Sunday, Australia defended its decision to ditch the multi-billion-dollar order for French submarines and opt for an alternative deal with the U.S. and UK, saying it had flagged its concerns to Paris months ago. 

While Australia's Prime Minister Scott Morrison said he understood France's disappointment in response to the order cancellation, he emphasized his focus on always taking decisions in the nation's best interests. 

"I don't regret the decision to put Australia's national interest first," the leader said. "This is an issue that had been raised by me directly some months ago and we continued to talk those issues through, including with defense ministers and others."

Source(s): AFP

Search Trends