BAE Systems to build, ASC to sustain AUKUS submarines in Australia

The Australian government has announced that Australia’s fleet of SSN‑AUKUS submarines will be built at Osborne, South Australia, by a joint venture between government-owned ASC Pty Limited and BAE Systems

Australia’s Deputy Prime Minister Richard Marles and UK Defence Secretary Grant Shapps made the announcement, marking the next step in the pathway for Australia to build and operate its own nuclear-powered submarines.

“There is no country in the world which has obtained the capability to build nuclear-powered submarines who’s then turned that capability off,” said Marles. “And that’s what people need to understand we are doing here at Osborne in having the first of the nuclear-powered submarines roll off the production line in the early 2040s: On a drum beat thereafter every few years we will see submarines being produced here on an enduring basis.”

Under the AUKUS agreement, Australia and the UK will operate a common submarine of the future, incorporating technology from both nations and the USA, based on the UK’s next generation design which BAE Systems is leading.

The SSN-AUKUS will be the largest, most powerful and advanced attack submarines the Royal Navy has ever operated and will start to replace the Astute- class, which BAE Systems is building at its site in Barrow-in-Furness in the North West of England, from the late 2030s. The company has built five of seven Astute-class boats. Australia expects to deliver its first SSN-AUKUS submarine in the early 2040s.

BAE Systems is the UK’s long-term submarine build partner and brings critical nuclear-powered submarine-building experience and intellectual property. The involvement of BAE Systems in Australia ensures an integral connection between the SSN-AUKUS design led by BAE Systems in the UK and the development and maturation of the Australian build strategy.

“We have made significant progress in the past 12 months under AUKUS,” said Marles. “At the heart of today’s announcement are Australian jobs and a pipeline of work for local Australian industry as we deliver on the commitment to build and sustain submarines here in Australia – and create a sovereign industry and workforce.

“This announcement today is further evidence that the AUKUS agreement continues to be implemented at pace by all three partners.”

The Government has also selected ASC Pty Ltd to carry out the sustainment of nuclear-powered submarines, commencing with the Virginia class and followed by the SSN-AUKUS. This decision recognises ASC’s long history and expertise in the sustainment of submarines in Australia, in addition to its established workforce and supply chain network.

Building on ASC’s current role and capability in sustaining Australia’s Collins-class boats, ASC’s sustainment capability for nuclear-powered submarines will be uplifted in the lead up to Australia acquiring its first Virginia-class submarine from the United States in the early 2030s.  It will include significant workforce growth and the development of skills, knowledge and experience required to sustain Virginia class submarines.

In submarine construction ASC Pty Ltd and BAE Systems will work closely together and initially form a collaborative arrangement, which will lead to the establishment of a long-term incorporated Joint Venture within Australia. This Joint Venture will establish an enduring partnership between the two companies to leverage their unique and complementary capabilities, skills, expertise and resources to deliver Australia’s SSN-AUKUS submarines.

“The construction of conventionally-armed, nuclear-powered submarines will be the greatest industrial endeavor Australia has ever attempted, both in scale and technical complexity,” said Minister for Defence Industry Pat Conroy. “We are now closer to realizing this generational undertaking.”

Currently, ASC is Australia’s prime sovereign submarine sustainment partner, and the builder of the RAN’s Collins-class submarines. Its experience in submarine construction, testing, commissioning and certification, including physical integration of US combat systems, make ASC a reliable, tested and capable partner.

BAE Systems is the United Kingdom’s long-term submarine build partner and brings over 60 years of nuclear-powered submarine building experience,  industrial capability and intellectual property to this partnership. The company’s involvement ensures an integral connection between the SSN-AUKUS design led by BAE Systems in the UK, where Australian experts are already working alongside their peers, and the SSN-AUKUS build strategy in Australia.

The two companies and eventual Joint Venture will be accountable and responsible for the delivery of Australia’s SSN‑AUKUS submarines, as well as ensuring safety, security, and regulatory compliance throughout the build program.

The Commonwealth will hold sovereign protection rights in relation to the governance of the Joint Venture to preserve Australia’s national interest in the build program.

The passage of the National Defense Authorization Act (NDAA) in December 2023 through the United States Congress represented important progress toward enabling the next steps in realising Australia’s submarine capability. The Act established exemptions that will authorise Australian workers to sustain US submarines – an activity never before enabled under US legislation.

With the NDAA passed, there will be opportunities to embed Australian workers from ASC in the Pearl Harbor Naval Shipyard to train on sustainment of US conventionally-armed, nuclear-powered submarines. ASC will also provide sustainment support to visiting US and UK submarines at HMAS Stirling, in the lead up to the establishment of Submarine Rotational Force-West from 2027.

Australia has agreed a $1.5 billion investment for early priority works at Fleet Base West to help ensure the safety and security of United Kingdom and United States SSNs through Submarine Rotational Force-West from 2027. Australia has also commenced enabling works at the future nuclear-powered submarine construction yard at Osborne Naval Shipyard in Adelaide.

The United States has also announced planned investment of US$11.4 billion ($17.3 billion) in its submarine industrial base across the five-year defence budget period starting in 2025 to increase the production rate of Virginia-class submarines as quickly and effectively as possible, to meet its own fleet requirements and support US commitments under AUKUS.

The UK Ministry of Defence awarded BAE Systems almost £4 billion ($7.7 billion) for the next phase of the SSN-AUKUS programme in October last year. The funding enables BAE Systems to progress the detailed design phase of the program and procure long-lead items.  It is also funding significant infrastructure investment in Barrow, which will see the site’s facilities double in size from 80,000 to 160,000 m2 by the late 2030s, as part of a multi-billion pound program, and continued recruitment. BAE Systems has already increased its UK submarines workforce to 13,500 with plans to grow to around 17,000 at its peak to support SSN-AUKUS in the UK.