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French submarine builder wants to send bill to Australia soon for failed deal

2021-09-23T11:52:22.826Z

France and the USA are getting closer again in the submarine dispute. But because Australia opted for the weapons system from overseas, the manufacturer Naval Group wants to use the country for the costs of the lost business.



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Depiction of a French Suffren-class submarine: "Contract terminated for convenience"

Photo:

DCNS GROUP / picture alliance / dpa

France is angry because Australia canceled a submarine deal in favor of a delivery from the UK and the USA.

The manufacturer, the French Naval Group, doesn't want Australia to get away with it that easily.

The company's boss, Pierre Eric Pommellet, told the French newspaper Le Figaro that a "detailed and calculated proposal" would be submitted soon about the cost of canceling the agreed delivery of submarines.

Australia will receive an invoice "in a few weeks".

"Australia terminated the treaty out of convenience, which means we are not to blame."

French behind schedule for years

"It is a case that is provided for in the contract and requires the payment of our already incurred and still to be incurred costs," said Pommellet, explaining the move to the newspaper.

This included the costs for the »demobilization of the infrastructure and IT« and the »regrouping of employees«.

Pommellet reiterated: "We will assert our rights."

Australia had previously complained that business with the Naval Group, which is partially owned by the French state, was years behind schedule and well above budget. In 2016, Canberra signed a contract to buy twelve diesel-powered submarines. The deal has been dubbed the "Contract of the Century" and was valued at 50 billion Australian dollars. The contract was later revalued at 56 billion euros.

However, the USA, Great Britain and Australia surprisingly announced a new security alliance for the Indo-Pacific in mid-September. This also includes the construction of nuclear submarines in Australia with US support. Australia then canceled the multi-billion dollar submarine deal with France. France described the move as "treason" and temporarily recalled its ambassadors from Washington and Canberra.

At least the relationship with the USA had eased somewhat recently. US President Joe Biden and France's Head of State Emmanuel Macron agreed "in-depth consultations" between their governments, as the White House and the Elysée Palace announced in a joint statement. According to the United States, the foreign ministers of the two countries spoke personally to each other on the sidelines of the UN General Assembly. According to both governments, the aim is to create conditions "to ensure trust". The recalled French ambassador to the United States, Philippe Étienne, is due to return to Washington next week.

According to the French Ministry of Defense, the Naval Group has already started talks with Canberra about a financial deal.

Accordingly, the Naval Group had already completed work worth 900 million euros on the submarines.

According to the Ministry, the company had not suffered any losses as the work was covered by Australian payments already made.

apr / AFP

Source: spiegel

All business articles on 2021-09-23

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