Figures for large complex projects are always fuzzy - pleasing no one.
In response to Submarine Matters’ article "Pricing SSNs for a FOREIGN Customer is UNPRECEDENTED" of February 2022 Anonymous made interesting comments on Feb 4, 2022, 1:17:00 PM, Feb 4, 2022, 8:02:00 PM and Feb 5, 2022, 10:07:00 PM.
Pete Comment: We need not get too hung up on $figures, as they are only very approximate. Many costs will be un-accounted for. No one can predict how much of a profit margin (as Anonymous points out) the UK and US will extract from Australia. Adjusting for inflation and whole of 80 year Program costs (including personnel and operations) might yield a Total Cost of more than AU$200 Billion.
Anonymous indicates (along the lines):
Regarding pricing - with AUKUS being the first SSN export pricing case. Obviously the US/UK SSN program has valuable intellectual property (IP) which was developed over decades and costing the UK Royal Navy and USN many billions to learn. This cost could be spread over 200 or so SSNs and SSBNs built to date. What margin might they charge the RAN for SSN technology IP? I don't know.
I would suggest that the best approach for the RAN is simply to acknowledge the value and offer what it has of value in return. In this case I think that is basing. If facilities at Australia’s submarine base at Fleet Base West/HMAS Stirling and Fleet Base East in Sydney Harbourare upgraded to support UK and US SSNs, that is of real value to the RN and USN.[Pete Comment: However nuclear safety and environmental public/political sensitivities may prevent nuclear submarines from ever being permitted in Sydney Harbour].
On current unit prices for the SSNs (Astute-class and Virginia-class) currently being sold to the UK RN and USN, those prices appear to be comparable to the project budget already described for the Attack Class, ignoring the premium for local manufacturing cost.
All the prices I quoted were in current dollars, or the year I quoted them for. I converted to Australian dollars on current exchange rates. Ignoring the cost of sustainment and nuclear fuel cores (so SSN capital expenditure only) I would still say current quoted prices (to their own governments) of SSNs as at 2020/21 USN advise to the US Congress https://news.usni.org/2021/06/24/report-on-virginia-class-attack-submarine-program-3are as follows:
French Barracuda (Suffren) SSN = 1.7 billion Euros = AU$2.8 billion A$ (AU$ are Australian dollars)
UK Astute (program average) SSN = 1.6 billion UK pounds = AU$3.1 billion
US Virginia (Block 4) SSN = US$2.8 billion = AU$3.9 billion
US Virginia (Block 5) SSN = US$3.5 billion = AU$4.8 billion
The cost of the Australian nuclear safety regulatory regime will be additional. I don't know what it will cost but I note: the Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) https://www.arpansa.gov.au/has 140 staff overseeing 47,000 workers in Australia’s radiology industry now [much of it being X-rays other medical imagery and anti-cancer isotopes] with an annual budget of $30 million in 2020. If we assume ARPANSA had to be doubled in size to oversee another 2,500 SSN sailors plus 5,000 SSN construction workforce, that is another $30 million per annum, or $1 billion over 30 years, less than the cost of running a single SSK per annum. [Pete Comment – this figure might become much higher.]
On timing, we know that France’s Naval Group was 3 years late getting the Barracuda Suffren first of class launched, with another 5 to go plus Frances future 4 x SSBNs. I agree that, assuming that the RAN was Naval Group's third priority - see https://gentleseas.blogspot.com/2021/02/frances-new-ssbn-aus-attack-class-2nd.html, they are not in a position to build SSNs for the RAN in a timely manner.
One of the biggest costs in getting SSNs operational in the past was obtaining the necessary amount of highly enriched uranium (HEU) to build reactor cores. This problem has largely passed [resolved?]. HEU from removed from surplus nuclear bombs since the end of the Cold War [resulting is a 1990s HEU glut https://www.armscontrol.org/act/2013-12/looking-back-us-russian-uranium-deal-results-lessons] is sufficient to build reactor cores for new SSNs for the USN and RN. This saves a lot of cost.
Stewardship of the US nuclear stockpile costs US$4.5 billion (AU$6.3 billion) per year. That supports 80 nuclear ships and subs or US$200 million per year per SSN. Australia’s proportionate share might be a tenth, or US$600 million per annum (AU$800 million). This is a high cost, AU$25 billion over 30 years, but within the proposed AU$90 billion delivery cost of the Attack Class program over 30 years. Including the ARPANSA’snuclear stewardship for 8 RAN SSNs would be AU$25 billion over 30 years for nuclear stewardship and regulation. [Pete Comment: also there may be an onshore training reactor at Lucas Heights, Sydney, to administer.]
The Brookings Institutes 1998 study https://www.brookings.edu/the-hidden-costs-of-our-nuclear-arsenal-overview-of-project-findings/might be helpful
These are only assumptions based on comparable current Australian and US costs, but I think are realistic to get an idea of Operational Expenditure Costs for SSNs for the RAN. Crew will be extra.
A final comment on the cost of establishing support infrastructure for SSNs. [After training, building the SSNs, including cost of the reactors, and regular major overhauls] The largest cost will obviously be establishing the institutions, staffing them and infrastructure. [Pete comment: Major physical infrastructure costs for the large, sensitive nuclear propelled SSNs, will be high. This is at Fleet Base West near Perth, maybe a Dedicated East Coast SSN Base (if Sydney residents don’t want SSNs in their midst) and at ASC’s https://www.asc.com.au/submarine building yard in Adelaide, South Australia.] A useful guide to the cost of the latter can be obtained from looking at the cost of recent comparable projects.
In the UK Devonport https://en.wikipedia.org/wiki/HMNB_Devonport Dockyard no.10 dock is being upgraded to nuclear standards to enable the sustainment of future Dreadnought class SSBNs there. This is reportedly costing approximately £1 billion or $2 billion A$. https://www.navylookout.com/upgrading-the-royal-navys-nuclear-submarine-support-facilities/
By comparison, the upgrading of the ASC submarine shipyard was contracted for $1.2 billion in 2018 for the Attack Class build. This suggest another billion $ or so may need to be spent to bring it up to a nuclear engineering standard.
The Fleet Base West/HMAS Stirling and ultimately Fleet Base East [or even a dedicated SSN Base on the East Coast] facilities will also need upgrading. So the RAN might be up for $3 to $4 billion [or even AU$15 Billion in 2040 dollars] in total for this. Not cheap, but this will give Australia the capability to build, maintain and sustain SSNs. Once this work is completed RAN and USN SSNs could be based in Australia, and RAN crews and support personnel could start gaining experience operating and sustaining SSNs. The Perth work (at least) should begin immediately.
Pete Comment
The Australian Nuclear Submarine Taskforce might want to report to Parliament, around April 2023, first.