Australia to pay France $ 4.1 billion over submarine contract breach

Sydney, Australia, Apr 1 (EFE).- Australia said it would have to pay France some $ 4.1 billion for unilaterally breaking a contract for the construction of submarines by the French company Naval Group, which sparked a diplomatic crisis between the two nations in September.

During a Friday Senate session, opposition Labor Party representative Penny Wong questioned the Defense Ministry Deputy Secretary Tony Dalton about the development of the negotiation to break the agreement, signed in 2016.

“Do we now have a situation where the taxpayer will pay up to AUD 5.5 billion for non-existent submarines?” Wong said.

“The final negotiated agreement will be within that price,” Dalton said, adding that the final cost would depend on compensation demands.

Australia signed a contract valued at AUD 90 billion for the construction of a dozen diesel-powered submarines.

However, the country announced in mid-September that it was scrapping the deal after agreeing with the United States on access to its technology for the construction of nuclear submarines, based on a security alliance with Washington and London.

The French government then accused Australia of “breaking the relationship of trust” between the two countries by scrapping the agreement.

France even recalled the ambassadors of Australia and the United States for consultations, an unprecedented decision in relations between the allies, and although the Washington envoy returned a few days later, the one from Canberra did not return for several weeks.

The French state-owned company Naval Group announced it would present to Australia the invoice of what it would have to pay for the expenses the company and its industrial partners had already made or had committed, in accordance with what was stipulated in the contract. EFE

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