Australian taxpayers will contribute nearly $5 billion (around £2.4 billion) to the UK government to support the expansion of British production lines for Australia's inaugural nuclear-powered submarines.
This investment also includes a downpayment on design efforts. BAE Systems (LON:BAES), the defence giant managing the challenging future frigates program, has been named the local constructor for the AUKUS-class submarine, a joint venture with the Australian and British navies.
Collaborative effort
A collaborative effort between BAE Systems and the Australian government-owned ASC will initiate the construction of the first submarine by the decade's end, aiming for service commencement in the early 2040s.
ASC is also set to oversee the maintenance of the Virginia-class submarines procured second-hand from the United States during the 2030s, alongside the domestically built submarines.
This strategic alliance is expected to trigger a shipbuilding surge in Adelaide, with design work for the new $2 billion submarine yard starting promptly. At the construction peak, it is anticipated that 4,000 individuals will be employed.
Job creation
The project's scale will expand when submarine construction begins, with direct employment of 4,000 to 5,500 workers and an estimated 20,000 nationwide jobs in engineering, maintenance, and the supply chain.
Defence Minister Richard Marles, alongside Foreign Minister Penny Wong and their UK counterparts, will announce this new framework at the Adelaide shipyard.
This event is a precursor to annual defence and diplomatic discussions, marking a big investment in the trilateral partnership aimed at bolstering Indo-Pacific security and technological advancement.
Read more on Proactive Investors AU