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As the security agreement between the US, UK, and Australia continues forward, the largest defense company in Britain, BAE Systems, has been awarded a £3.95 billion ($4.82 billion) contract to construct a new generation of submarines.
The so-called Aukus accord, which calls for the three nations to give Australia nuclear-powered attack submarines by the late 2030s, was first made public in March.
The agreement attempts to thwart China’s plans for the Indo-Pacific area.
Beijing has harshly criticized the three nations over the agreement.
BAE Systems Chief Executive Charles Woodburn said, “We’re immensely proud of our role in the delivery of this critically important, tri-nation submarine programme.
According to BAE, the financing will cover development work through 2028, with production of the boats scheduled to begin at the end of this decade.
In the late 2030s, the first SSN-Aukus submarine is expected to be delivered.
The SSN-Aukus submarines, which are based on British designs, will be used by both the UK and Australia.
UK defense minister Grant Shapps said as the Conservative party conference began in Manchester, “This multi-billion pound investment in the Aukus submarine programme will help deliver the long term hunter-killer submarine capabilities the UK needs to maintain our strategic advantage and secure our leading place in a contested global order.”
The SSN-Aukus, which BAE is currently building at its facility in Barrow-in-Furness, Cumbria, will eventually replace the Astute class and be the largest, most powerful, and most technologically advanced attack submarine ever deployed by the Royal Navy.
The pact will guarantee decades of employment at the shipyard in Barrow-in-Furness, which employs over 10,000 people.
The business claimed that the agreement will also finance significant site improvements, supply chain improvements, and the hiring of more than 5,000 new employees.
According to the corporate website, BAE employs more than 93,000 employees worldwide and 39,600 of them in the UK.
The Aukus agreement is benefiting other significant UK defense firms as well.
It was announced in March that all of the nuclear reactor plants needed to power the SSN-Aukus ships would be supplied by Rolls-Royce Submarines.
Rolls-Royce said in June that the acquisition would roughly increase the size of its Raynesway site in Derby. The UK’s submarine maintenance and support company, Babcock International, announced on Sunday that it has agreed to a five-year contract with the Ministry of Defence to work on the SSN-Aukus design.
China has frequently criticized the Aukus security alliance since its initial announcement in September 2021.
The three Western nations counter that the agreement is meant to strengthen Indo-Pacific stability.
A submarine contract is a formal agreement for the building or upkeep of submarines between the government and a defense contractor. These agreements frequently entail funding in the billions of dollars and are extremely complicated. Governments frequently request proposals from several contractors before granting a contract, thus they can also be very competitive.
The following clauses are frequently included in contracts:
- The type and number of submarines to be built or maintained
- The cost of the contract
- The timeline for completion of the contract
- Quality standards and performance requirements
- Warranty and maintenance provisions
- Intellectual property rights
The ability of several nations to defend itself depends on contracts. A very adaptable and powerful weapon system, submarines can be utilized for a wide range of tasks, such as:
- Maritime surveillance and reconnaissance
- Anti-ship warfare
- Anti-submarine warfare
- Special operations
- Nuclear deterrence
The world economy also places a lot of emphasis on submarine contracts. Submarine construction and maintenance needs a variety of industries, including shipbuilding, engineering, and electronics, and is a highly skilled and sophisticated process. The economic activity brought on by submarine contracts has the potential to produce thousands of jobs and billions of dollars.
Here are a few instances of recent contracts for submarines:
- In 2023, the United States awarded a $9.4 billion contract to General Dynamics Electric Boat to build six new Virginia-class submarines.
- In 2022, the United Kingdom awarded a £3.95 billion contract to BAE Systems to build two new Astute-class submarines.
- In 2021, India awarded a $3 billion contract to Russia to lease a nuclear-powered submarine.
These are just a few examples of the many submarine contracts that are awarded each year. Submarine contracts are an important part of the defense and economic strategies of many countries.