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Thousands of jobs at stake in $90 billion submarine project

Reports that Prime Minister Scott Morrison has ordered a review of the $90 billion future submarine program is the latest sign of Federal Government frustration over Australia’s costliest defence project.

The Federal Government said about 4000 jobs in Adelaide will be involved in building the submarines.

An artist impression of Australia’s Future Submarines. (Naval Group) (Supplied)

The French company has to date not formally committed to spending 60 per cent of the contract value on local suppliers.

Last week Minister for Defence Industry Melissa Price met Mr Pommellet in Australia.

“We must achieve at least a 60 per cent spend of the total contract value with Australian businesses,” she said after the meeting.

Defence expert Marcus Hellyer told Nine.com.au that there is “profound disquiet” in the government about the submarines project.

The expected cost has blown out by nearly another $10 billion on top of the already expanded $80 billion price tag.

But Dr Hellyer said the focus on Australian industry’s involvement overlooks other vital factors.

Defence Minister Linda Reynolds is set to meet the chief of French defence contractor Naval Group over the Future Submarines project. (Getty)

“It is important to focus on Australian industry content but the discussion needs to focus—on the capability. Are we getting the capability we need when we need it, and is it value for money.”

He also said it would be unlikely that the Federal Government would cancel the multi-billion dollar contract.

“It’s hard to imagine. Conservative governments in this country draw their credibility and mandate to rule from their reputation as good economic managers,” Dr Hellyer said.

“Admitting that they had mismanaged the largest public sector project in the nation’s history would strike at the heart of that credibility.”

The government announced the selection of Naval Group – then known as DCNS – for the future submarines project in April 2016.

Japan – $66.3 billion

Countries with the highest military expenditure in the world

The first of the submarines to replace Australia’s ageing Collins-class fleet is expected in 2034, with the last due by 2054.

Source: 9News | World News

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