SYDNEY (Reuters) - Australian Minister for Defence Christopher Pyne said on Wednesday a new fleet of submarines, worth A$50 billion ($36.57 billion), will be delivered on time and on budget - rejecting a media report that costs could blow-out by as much as 25 percent.
Australia selected France’s Naval Group in 2016 as its preferred bidder for a fleet of 12 submarines, then one of the world’s most lucrative defense contracts, ahead of other offers from Japan and Germany.
More than two years on, final contracts have yet to be signed, and Australian Broadcasting Corporation reported Canberra was willing to accept costs rising by 25 percent and the first vessel to arrive two years late.
The first of the new submarines is scheduled to be delivered in the early 2030s and the final vessel during the 2050s.
Pyne rejected the report, insisting the Strategic Partnering Agreement, the overall contract to guide the construction, would be signed by mid-December.
“There has never been a suggestion by the Commonwealth that there should be, or could be, a 25 percent cost blow-out or a two-year delay, as part of the negotiations,” Pyne told reporters in Canberra.
Australia rejected offers from Japan’s Mitsubishi Heavy Industries and Kawasaki Heavy Industries and Germany’s ThyssenKrupp AG when it selected the French bid.
Australia’s planned 12 new submarines will be a centerpiece of its plan to significantly expand its military to protect strategic and trade interests in the Asia-Pacific.
($1 = 1.3672 Australian dollars)
Reporting by Colin Packham; Editing by Michael Perry