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$381m subs upgrade as French compo talks drag on

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The ageing Collins class submarines will undergo a $381m camera systems upgrade as the Morrison Government revealed compensation talks with France’s Naval Group over the scrapping of a $90b contract to build a new fleet are likely to continue well into the next financial year.

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Defence Minister Peter Dutton on Monday conceded negotiations with Naval Group about the government’s decision to tear up the contract in favour of nuclear powered submarines as part of the new AUKUS security pact were expected to drag out.

It was originally hoped the settlement between Australia and Naval Group would be finished by the end of the current financial year.

However, Dutton said it would most likely carry on into the next financial year.

“It will be after the election, it’ll take some time,” Dutton told reporters.

“The negotiations are under way at the moment, so once those figures have been settled, then we will provide that information.”

Earlier this year, a Senate estimates hearing was told termination costs as part of the previous submarine deal could be more than $5.5 billion.

Taxpayers have already been slugged more than $2.5 billion for Australia pulling out of the deal.

Dutton said he did not want to state the figure that was being negotiated with Naval Group.

“What happens in a commercial negotiation is if the other side knows that you’ve got a hard deadline, then they’ll hold you over a barrel,” he said.

The comments came as Dutton announced the Collins class fleet built between 1990 and 2003 will be made stealthier after the $381m upgrade to install a “cutting edge optronics system” at Osborne in Adelaide.

Replacing the existing periscope system, Dutton said optronics involves a digital camera on an extendable mast-raising system outside the pressure hull taking images and transmitting it into the submarine digitally.

HMAS Rankin will be the first submarine to undergo the upgrade from 2024, with the technology operational by 2026.

Dutton said the upgrade would ensure the diesel-electric Collins class boats “remain a potent and agile deterrent” until replaced by nuclear propelled submarines.

“The optronics system will help maintain the tactical advantage in intelligence gathering, surveillance, reconnaissance, and anti-surface warfare,” he said.

“It will make our submarines stealthier by reducing the amount of time the submarine is exposed above the surface. Stealth is vital to a submarine.”

-with AAP

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