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Note: All dollar values are USD.

One of the great advantages of diesel-electric attack submarines over nuclear-powered versions is that the former typically cost far less, so countries can purchase many more of them (There's a Case for Diesels).

Japan's latest diesel-electric attack submarines, the Taigei class, cost $639M/unit (Taigei-class submarine). And Germany's latest version of their Type 212 diesel electric submarine costs $1.3B/unit (Norway's new subs especially designed for covert, shallow water operations).

By contrast, the US's most advanced nuclear attack submarine, the Virginia class, costs $2.8B–$3.4B/unit (Virginia-class submarine).

The latest unit cost of the 12 Shortfin Barracuda Block 1A diesel submarines in Australia's now-scrapped deal with France was $66B/12 submarines = $5.5B/unit. Granted, that's a result of cost overruns. But even if we consider the initial projected cost when the deal was inked in 2015, that's still $36B/12 submarines = $3.0B/unit (Attack-class submarine: Construction). And that's just for the submarines themselves—it doesn't include maintenance (Why Australia wanted out of its French submarine deal).

So why was Australia willing to enter into a deal that required them to pay nuclear-submarine unit prices for mere diesel-electric submarines?

The only explanation I've been able to find for why they chose the vastly more expensive Barracuda over the less-expensive competing Japanese and German designs is that they really wanted nuclear propulsion, but it wasn't politically palatable at the time. And the Barracuda, unlike the Japanese and German offerings, was based on a nuclear attack submarine design, and thus could be retrofitted with nuclear propulsion when the political climate changed:

On Sunday, a report in the Australian Financial Review noted that while nuclear marine propulsion for Australian attack submarines is a politically untenable position for the government in Canberra today, the Turnbull government wants to keep its options open...should an SSN become politically viable for Australian needs in the future, converting the Shortfin Barracuda‘s propulsion system back would be viable. With the diesel-electric Soryu and Type 216, this is option is effectively closed off without significant research and development.(The Deceptively Simple Reason Australia Picked the Shortfin Barracuda)

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    Note that French Barracuda submarine normally have nuclear propelors. Switching to Diesel motors for this command was a specific demand from Australians (supposedly because without a local nuclear industry, they wouldn't have been able to replace the fuel themselves every ten years as required, and would have been dependant on France for that part).
    – Evargalo
    Sep 21 at 9:16
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    Shouldn't your last paragraph and the quote rather be one possible answer?
    – quarague
    Sep 22 at 6:58
  • 1
    Read more about electric submarines. They can be undetectable or harder to detect than nuclear. For short-term missions/defending borders, they can be a better choice. Sep 22 at 11:45
  • Minor nitpick: German subs are fuel cell electric based and not diesel electric.
    – SEJPM
    Sep 24 at 7:31
  • Not an answer, but: In general, for such comparisons one has to be careful what is or is not included in the price, like maintenance and service and parts commitments. The cost to produce a single unit is likely smaller than the overall "system cost" divided by the number of units. Sep 24 at 10:17
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I don't have all the accounting details, but one reason supposedly was that 60% of the money was earmarked to go to the local Australian suppliers.

Unlike many of the other examples you gave, which were built in foreign docks, these French-tech subs were supposed to be built in Australia.

Apparently that also involved building an entirely new construction facility in Osborne, albeit next to some existing ones where older Australian subs had been built; the shiplifting facility was apparently going to be reused though.

Located at the Osborne Techport facility in Adelaide, South Australia, the Submarine Construction Yard (SCY) will be the home of the Future Submarine Program, alongside other maritime defence programs, including the Hunter Class SEA 5000 and Collins Class submarine sustainment programs. The location of the SCY is adjacent to the ANI-operated Common User Facility (CUF) in Osborne, which includes a Shiplift facility which will be used to launch the submarines when they’re completed. [...]

The SCY facility is being designed and built by the managing contractor, Laing O’Rourke, to the specifications developed by Naval Group based on extensive experience in submarine design and build.

Somewhat of an aside: it does look like Australian sub projects have a high cost recently, e.g. the overhauls of the existing 6 Collins class subs (that Australia presently posseses) was put at 6 bn AUD (that's about 4.35bn USD) according to a June 2021 statement of the defense minister Peter Dutton.

One would have to factor in inflation for a better comparison, but in nominal terms that's actually more than what it cost to build those 6 subs in the first place (5.1 billion AUD), according to Wikipedia. The planned Collins refurbishments look pretty extensive though as each sub was slated to spend two years in dry dock. This is also fairly similar to the original build time, approximately 26 months on average for a Collins. It is certainly a lot less than e.g. a Virginia class, which takes some 6-7 years, albeit that is slated to be reduced to 5 as more get produced. The Barracuda/Suffren do seem to exceed the Virginia class in this regard though, seemingly taking 7-12 years. (One would probably also have to consider that the US plans to have 66 Virginias, while France only ordered 6 Barracudas, so there are more incentives and opportunities to speed up production of the former.)

A more recent Sep 2021 press article has put the refurbishment cost of the Collins boats at AUD 9 bn, but it's not too clear what the source of this latter figure is.

So, just as a ballpark estimation, if we consider a triple building time, and twice the number of boats (12 vs 6) compared to the Collins, we'd expect the [cancelled] Attack programme to have cost around 36-54bn AUD. The difference to AUD 90 bn probably were technological premiums etc.


I know this isn't exactly what the question ask, but I found it intersting how the jump from the 50 to 80/90 billion public estimate happened.

Around 2018 when the Australian subsidiary of the French manufacturer ordered the first (test) batches of steel from Australian manufacturers, the cost of the project was still being quoted by the press at around 50 bn AUD.

According to a 2020 news piece, apparently the public was mislead by being told of the lower bound of the goverment's estimates rather than what they really thought it might cost:

it has now been revealed the government budgeted for the project to cost $78.9 billion as far back as October 2015. This was the same month Defence officials told a Senate estimates hearing the out-turn cost was $50 billion.

The disclosure was made by the Department of Finance in response to a question on notice from a parliamentary inquiry into Australia's shipbuilding program.

Opposition defence spokesman Richard Marles said the revelation showed the government had "refused to be upfront about the true cost of the program".

The official response from a Defence spokeswoman was simply that... the 50 bn was a lower bound.

"In the 2016 Defence white paper, the government publicly advised the Future Submarine program would involve an investment of greater than $50 billion. Similarly for the Future Frigate program, the 2017 Naval Shipbuilding Plan outlined its plan would involve an investment of greater than $35 billion, noting for both programs the need at the time to protect the commercial position of the Commonwealth during negotiations."

(Emphasis mine. The cost of the frigates was mentioned because that also went up, albeit in less dramatic fashion only to $45.6 billion by 2018.)

Marcus Hellyer, a senior analyst at the Australian Strategic Policy Institute, said the revelations suggested the estimates were "deliberately sanitised to take the sting out of it".

"One would suspect if they did give a band, the submarines would be $50 billion to $100 billion, and it would be such a huge number it would terrify the Australian public into not wanting to go down that path," he said.

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    (+1) Incidentally, France is paying much less from DCNS for nuclear submarines.
    – Relaxed
    Sep 21 at 9:29
  • That would certainly explain a good part of the increased expense.
    – theorist
    Sep 21 at 9:50
  • 3
    FWTW, for the new Aukus subs the Australian gov't is seemingly setting a 40% local inputs target crikey.com.au/2021/09/16/ausuk-nuclear-submarine-alliance
    – Fizz
    Sep 21 at 11:08
  • 1
    @Relaxed DCNS was renamed to Naval Group a few years ago now ;) . I think an important part is that Naval Group has been one of the few manufacturer willing to do "technology exchange" (see with brazil for exemple). Australia was not just buying the sub, they were buying the knowledge to make and operate the subs too.
    – Maeln
    Sep 23 at 13:06
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    @Maeln: good point mentioning Brazil. DCNS is building 5 subs for them, but in Brazil. 4 are Scorpene-class, but the Álvaro Alberto is nuclear-powered using Brazil's own reactor (and own enriched uranium, apparently--they have a centrifuge program). Alas I don't know how much each sub would cost. I've seen a 8.9 bn USD figure for the whole shebang quoted, but that probably doesn't include the reactor. reuters.com/article/us-brazil-submarine-idUSKBN1OD2CV
    – Fizz
    Sep 23 at 14:10
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I agree with @Fizz's answer, but there is an important detail to add. Australia was buying secret military technology. The project includes a Pump-jet drive that the French claim is more silent than American and Russian similar propulsion. Plus there are all the electronics and control systems. Given how advanced the project was it is possible that some technologies were already disclosed to the Australian subcontractors, in this case the new submarines may end up having a mix of the best French and American military technologies.

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    Yeah, it does look like Australia was willing to pay a premium for next-gen super-quiet subs. They in fact rejected the German offer as too noisy without even telling the Germans what precise noise was even the issue, despite repeated calls from the Germans for more details. Or at least that's the version of the story that got told in Australian political circles. apo.org.au/sites/default/files/resource-files/2021-05/…
    – Fizz
    Sep 21 at 15:20
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    @Fizz Interesting article. There's clearly controversy about how valuable pump-jet propulsion would be in a diesel sub, given (a) at lower speeds, where there is no cavitation, it's argued that pump-jet propulsion is not significantly quieter; and (b) pump-jet proopulsion is less efficient, which would lead to more frequent surfacing and refueling, thus magnifying diesel's principal weakness vs. nuclear. I wonder if that's why most modern diesel subs don't use it.
    – theorist
    Sep 22 at 2:03
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    @FluidCode When you write "a Pump-jet drive that the French claim is more silent than American and Russian similar propulsion", do you mean the French are claiming their pump jet propulsion is quieter than American and Russian pump-jet propulsion, or that the French are claiming their pump jet propulsion is quieter than American and Russian conventional propellor propulsion?
    – theorist
    Sep 22 at 2:06
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    @theorist: I think Australia was also hoping that past the first 2-3 hulls, the French subs would use lithium batts and high-speed AIP like the Japanese subs have. Frankly if Japan had agreed to build their proposed subs in Australia, instead of insisting on building them in Japan, their bid would have stood a lot better chance.
    – Fizz
    Sep 22 at 7:56
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    That's because pump jets (PJs) become less efficient at low speeds, and diesels spend most of their time at low speeds. PJs become advantageous for nuclear subs because they spend a lot of time traveling fast (unlike diesel subs, they have the energy to do this) and, at high speeds, PJs begin to show efficiency and quietness advantages relative to propellors (propellors risk cavitation at high speed, which is noisy). That, along w/ size, is why modern nuclear subs are typically PJ, while modern diesels are prop-driven. aspistrategist.org.au/pumpjet-future-submarine-not-fast-slow
    – theorist
    Sep 23 at 2:44
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The estimates of the per-unit costs of the original bids seem widely off. They refer to off-the-shelf submarines delivered to other navies, not any of the options Australia had on the table when they awarded the contract. There are at least three factors that can account for the cost difference between those and what Australia was loooking for: design changes (to accommodate special requirements regarding the combat and weapon system, autonomy, discretion, etc.), local content, and technology transfer.

For example, this article from 2016 provides a contemporary view of what happened during the last phase of the bidding. Importantly, it doesn't suggest the price was that different. Japan was hoping for a $40B deal, even before factoring the local work aspect. That's in the same order of magnitude than the last projected cost of the programme that was called off and very similar to the original DCNS bid.

Earlier in the process, there were people in Australia who recommended selecting an off-the-shelf design, whether from Japan, Germany, or Sweden (who made Australia's current Collins-class submarines) and that would perhaps have avoided all these problems. This 2021 article also mentions German-designed submarines as costing “half as much”. That's a significant difference but not as big as that betweeen off-the-shelf options like the Type 212 or Type 214 mentioned in your question and a bespoke design like the Type 216 (and that doesn't take into account predictable cost overruns, especially if built locally).

On the other hand, if you add specific requirements and want the submarines to be built locally, costs are going to be much higher and more difficult to control. That was true of the 2015 bids and will in fact almost certainly be true of the solution Australia is exploring now.

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    They're not my estimates, they're the values given in the articles I referenced. I may have missed it, but your article doesn't seem to specify how many ships the Japanese were going to build for $40B (was it also 12? you need that to get the Japanese unit cost). And did you confirm the $40B figure was USD rather than AUS (I had to be careful to verify this myself myself when reviewing each of the articles I referenced)? Finally, you said the the bid cost were driven up by the requirement to build locally, but your own article says the Japanese never agreed to that.
    – theorist
    Sep 21 at 9:17
  • 1
    @theorist It was part of the same bidding process so I assume it would be 12. Note that upfront costs are huge if you want a bespoke design and local work, the number of units will depend on the capacity of the boats and, ultimately, budget considerations. Comparisons with per-unit costs for off-the-shelf solutions are really apple-to-oranges.
    – Relaxed
    Sep 21 at 9:23
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    But before you were arguing the reason the costs for the French and Japanese bids were higher were both because they were bespoke, and because they were to be built locally: "if you add specific requirements and wants the submarines to be built locally, costs are going to be much higher and more difficult to control." But I've pointed out that the Japanese bid did not include the assumption of local building, which reduces the explanation for its high cost to being bespoke only. This raises the question: Was the Japanese bid for a bespoke design?
    – theorist
    Sep 21 at 9:29
  • 1
    @theorist Maybe I wasn't very clear but that's not exactly what I was saying. I believe both factors have an impact. And yes, all three bids were bespoke, I just added some details on the German ones. That's quite simple: to compare apples to apples, you have to look at the actual bids given the Australian requirements, not prices for random submarines that were not considered or per-unit costs for off-the-shelf boats. There is an order of magnitude difference, even before you look at local work and cost overrruns that would have added extra costs even to the Japanese or German options.
    – Relaxed
    Sep 21 at 9:33
  • 1
    Then I'm afraid I don't understand what you were trying to say, since I thought the statement I quoted from you, and my description of it, were both quite clear: You said both local building requirements, and bespoke design, contributed to the cost of the Japanese bid, and I pointed out the Japanese bid didn't have local building requirements. [I do agree both bespoke + local build would significantly increase costs.] But never mind. Moving on: Do you have a reference indicating the Japanese design was bespoke? I couldn't find anything about it in the 2016 article you cited.
    – theorist
    Sep 21 at 9:42
-2

They weren't, period.

The initial cost estimate was MUCH lower, but over time crept up and up to the point where it became an utter joke. Remember this program started in 2009 and by 2021 not a single sheet of steel had been cut.

There are strong suspicions (and that's putting it mildly) of large scale corruption and fraud in the program (just google it, I've seen multiple youtube videos and other claims by independent sources about it (so people outside of either Australia or France with no interest in the program except an interest in submarines or defense in general).

The main reason the Australians didn't abandon the program earlier seems to have been clauses in the contracts that made it next to impossible for them to back out even if the French never delivered anything. That and not really having an alternative that seemed to be able to deliver more quickly than the ever creeping French promises.

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    Do you have a reference saying that, at the time the deal was signed, the cost was much lower than the $31B quoted in the article I found? Also, I've read the penalty for backing out of the deal prior to the delivery of the first ship was $400M, which analysts have said is modest relative to the expected $66B cost of the contract. Indeed, it's given as one of the reasons Australia was willing to back out— the other being that they would be getting the US's most advanced nuclear attack subs for about half what they expected to pay for the French diesel subs, plus they wanted nuclear anyways.
    – theorist
    Sep 21 at 8:40
  • 3
    @theorist they didn't want nuclear, the french submarine are nuclear but they ask for them to be diesel instead Sep 21 at 14:38
  • @theorist the numbers the local media are quoting is around $2B but not sure how reliable those numbers are. Sep 22 at 1:40
  • @Bougainville According to the last article I cited in my OP, the Aussies did want nuclear propulsion at the time they made the contract with the French, but the politics precluded that, so they instead went with a diesel design that could be retrofitted to nuclear propulsion. However, at the time they switched to getting US subs, the political landscape had changed, so they were able to go with nuclear propulsion, which is what they really wanted from the start.
    – theorist
    Sep 22 at 1:49
  • @theorist To understand how all this works, you have to make a distinction between all the discussions, speculations, etc. that took place from 2009 on and the formal bidding process at the end of 2015. Once the Australian government started a formal competitive evaluation process, then that defines what it wants and all bids will be based on that. The reasons for the extra costs compared to other solutions will also be found in the requirements for that bidding process (which seemed to be your original question, correct?)
    – Relaxed
    Sep 22 at 9:00

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