Australia to send billions to UK to build nuclear reactors to power AUKUS submarines

Defence Minister Richard Marles and Foreign Minister Penny Wong will travel to Adelaide on Friday alongside their UK counterparts Grant Shapps and David Cameron to unveil the crucial next steps towards the triennial partnership.

They will confirm domestic shipbuilder ASC will partner with BAE Systems under a joint venture to build the submarines at the Osborne Naval Shipyard.

Mr Marles said the arrangement proved AUKUS was continuing to move at pace and placed the government at the table in an “unprecedented way”.

“It reflects the fact that this is not a normal procurement. We are not going off to a shop to buy an item,” he said ahead of the announcement.

“This is a partnership between three governments which is intended to last forever.”

Australia will set aside at least $4.7bn over ten years to assist UK-based Rolls Royce, who will provide the reactors to power the SSN-AUKUS submarines, under the agreement.

It’s in addition to the $3bn that will also be provided to the US submarine industrial base to increase sustainment and production.

The investment would be funnelled into ramping up Rolls Royce’s production lines in order to accommodate for the additional reactors required to meet Australia’s demands.

It’s understood some of that funding will also be set aside to contribute to Australia’s share of the design costs of the SSN-AUKUS.

The government considers it a small drop in the ocean to the billions it has set aside for expanding Australia’s own industrial base, including the estimated $8 billion in infrastructure upgrades in HMAS Stirling in WA and at least $2 billion to build the new Submarine Construction Yard in SA.

Mr Shapps declined to comment directly on the cost, responding instead that “nuclear powered submarines are not cheap”.

“But we live in a much more dangerous world … countries need to invest in making sure adversaries see that we’re serious about security, defending freedom of navigation, for example,” he said.

The design of the SSN-AUKUS fleet will be based on the UK’s Astute-class submarines and will include the US combat system.

The first of Australia’s fleet of eight submarines will come from the US before ASC and BAE commences the build in Adelaide from 2040.

BAE, which is designing and constructing the Hunter Class frigates, has long been expected to be the partner of choice for the submarine build.

ASC and BAE will initially form a collaborative arrangement to allow work to commence immediately, as a complex legal work for a joint venture is nutted out.

It’s understood the government wanted to avoid the legal logjam that slowed down activity on the now-scrapped French submarine program.

The government will also unveil a “train the trainer” initiative in which VET teachers will be sent to the US for international placements to learn skills to bring back to Australia.

The full cost of the AUKUS submarine program, including construction and maintenance and service, is set to reach up to $368 billion by 2055.