Home News French sub builder to send Australia invoice ‘in a few weeks’

French sub builder to send Australia invoice ‘in a few weeks’

Published on September 22, 2021

France’s Naval Group said Wednesday 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.

Australia in 2016 agreed to buy 12 diesel-powered submarines built by Naval Group in a deal dubbed the “contract of the century” worth Aus$50 billion ($36.5 billion, 31 billion euros), later revalued to 56 billion euros.

However last week Australia ditched the deal in favour of nuclear-powered submarines from the United States and Britain, in a secretly negotiated agreement that infuriated Paris and sparked a diplomatic row.

Naval Group CEO Pierre Eric Pommellet 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,” he said.

“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 demobilisation of infrastructure and IT as well as the redeployment of employees,” he added.

“We will assert our rights.”

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

France’s defence ministry has said Naval Group has already started talks about a financial settlement with Canberra.

Naval Group had already completed 900 million euros ($1.1 billion) in work on the submarines, the ministry said, but suffered no losses as the work was covered by Australian payments already made.

But calling the pullout “a betrayal”, the ministry said the talks would now determine the size of “compensations and damages” owed by Australia.

Pommellet told Le Figaro that “this decision was announced to us without any prior notice, with unprecedented brutality.”

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