For AUKUS Agreement, ‘Devil is in the Details’

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Part two of the long road to provide Australia with a fleet of nuclear-powered submarines — known as the AUKUS agreement — got underway March 13 when the leaders of the three allies involved revealed an outline of the decades-long plan to the public in San Diego.

Australian Prime Minister Anthony Albanese, the United Kingdom’s Prime Minister Rishi Sunak and U.S. President Joe Biden revealed details of the arrangement for Australia to acquire a conventionally armed, nuclear-powered submarine capability through the Australia-United Kingdom-United States, or AUKUS, enhanced security partnership.

The announcement followed 18 months of studies investigating just how such a complex arrangement will work out.

“The broad brushstrokes all look perfectly fine. But to be honest, you don't solve the problem just by saying you're going to solve the problem,” said Mark Watson, director of the Australian Strategic Policy Institute’s Washington, D.C., office.

“There's an awful lot of devils lurking in an awful lot of details yet to be delivered,” he said in an interview.

The agreement will unfold in three phases, with the first being Australian sailors serving aboard U.S. boats beginning this year and U.K. nuclear-powered submarines starting in 2026. That will continue through the end of the decade. There will also be personnel exchanges between the industrial bases to build up Australia’s skills in operating nuclear-powered submarines.

As early as 2027, the United States and United Kingdom plan to begin forward rotations of SSNs to the Indo-Pacific, with Australian sailors aboard to accelerate the development of local naval personnel, workforce, infrastructure and the regulatory system necessary to establish a sovereign SSN capability, a joint statement said. These subs will operate out of an Australian base and be known as the Submarine Rotational Force-West.

Phase two will have Australia procure three — possibly up to five — U.S.-built nuclear-powered Virginia-class submarines in the 2030s.

Phase three will call for the remainder of the fleet to be new purpose-built submarines with a U.K. hull and U.S.-based systems inside — called the SSN-AUKUS — to be constructed at first in the United Kingdom in the late 2030s. Australia will deliver the first SSN-AUKUS built in Australia to the Royal Australian Navy in the early 2040s, the statement said.

“This plan is designed to support Australia’s development of the infrastructure, technical capabilities, industry and human capital necessary to produce, maintain, operate, and steward a sovereign fleet of conventionally armed, nuclear-powered submarines. Australia is fully committed to responsible stewardship of naval nuclear propulsion technology,” the statement said.

Watson said the first potential stumbling block is the United States’ restrictive International Traffic in Arms Regulation, which is designed to prevent exports of the nation’s most sensitive military technologies. And both submarine and nuclear energy technologies are considered some of the Unites States’ crown jewels.

“Unless the ITAR regime changes in relation to this project, this project won't succeed,” Watson said. “Something has to change. And that’s probably easier said than done. It’s almost like you need an AUKUS express lane on ITAR,” he said, which would involve congressional approvals.

Bryan Clark, senior fellow at and director of the Center for Defense Concepts and Policy at the U.S.-based Hudson Institute, said the plan the three leaders announced didn’t make clear that the Virginia-class submarines that Australia will buy in the 2030s will be second hand. The newest models under construction for the foreseeable future will have the Virginia Payload Module, a new capability that the Australians don’t need and expands the vessel’s size.

The plan calls for Australia to build port facilities at a naval base, HMAS Stirling near Perth in Western Australia, to support the scale of infrastructure required for nuclear-powered submarines — both for visiting and rotational submarines and for Australia’s own nuclear-powered submarines. Australia’s SSN-AUKUS submarines will be built at Australia’s future Submarine Construction Yard in Adelaide, South Australia, a fact sheet stated.

Meanwhile, Clark said the numbers also don’t add up as far as Australia’s budget. The nation simply won’t have the funds to buy up to five

Virginia-class subs, build up the necessary infrastructure at both U.S., U.K. and Australian shipyards and develop and buy the new SSN-AUKUS subs.

Clark believes the promises of new U.S. jobs and U.S. infrastructure may not come to fruition.

“I just think … that there's like a shell game going on here to ameliorate the critics,” said Clark, a former submariner in the U.S. Navy.

U.S. critics speculating on the plan before it was released questioned the subtraction of submarines from the U.S. fleet.

Sir Robin Niblett, a distinguished fellow and international relations expert at the U.K.’s Chatham House, had a more positive outlook on the agreement, especially as far as solidifying alliances in the Indo-Pacific.

There was concern in the United Kingdom that the nation would be a junior partner in the agreement and behind the United States and Australia in importance.

“This really is a three-way partnership. And so, what you're going to get, I think … will be some satisfaction for those who think this is important that the U.K. is as much of an equal partner as it can afford to be, being obviously much more [s0] than the U.S., but bigger than Australia,” he said. Australia in the agreement is committed to helping fund the U.K.’s part of the development, he noted, another positive development.

“It strikes me as a well-crafted, well-thought-through plan that cements what I've always thought of this deal as: it kind of ties Australia's long-term strategic security completely, inextricably to the United States in a way Australia becomes — in this new confrontation, contest, whatever you want to call it with China” — an Indo-Pacific version of what Britain has had in the Atlantic with the United States and the NATO alliance, Niblett said.

Another win for the United Kingdom in the deal will be the third phase, purpose-built submarines, he said.

“The SSN-AUKUS, as is being described, will be based on a U.K. next-generation design following the Astute-class submarines, and obviously that it will incorporate cutting-edge U.S. technology, including on the propulsion side and I would imagine on other aspects of electronic requirements and all the stuff that comes with that,” he said.

Australia intends to send hundreds of workers to U.S. and U.K. shipyards, as well as scientists and engineers to technical facilities to gain the experience required to build and sustain nuclear-powered submarines, a White House fact sheet stated.

Watson said he is hoping to see more details from his government on how it will start a pipeline of skilled workers that will include pathways to education through the universities, technical colleges and trade programs that will deliver the trained personnel that Australia needs to build and maintain the submarines. Its government is saying the agreement will create 20,000 more jobs.

There is currently a war for talent in Australia, he said. “There's high demand for skills in our mining sector that won't go away anytime soon,” he noted.

And like the U.S. military, the Australian Defence Force is falling short of recruitment goals, he said. “And submariners, I think, are a special breed, as anyone who's spoken to a submariner would know.”

Clark said the first phase, embedding Australian sailors in U.S. and U.K. attack submarines and forward deploying them to the Indo-Pacific, was a solid plan and won’t end up costing much.

As for the second phase, where Australia buys Virginia-class submarines, it is hard to see the U.S. industrial base producing more than two boats per year, he said. The Navy is building Virginia-class attack submarines and is in the beginning of building its first of 10 Columbia-class nuclear strike subs. U.S. shipyards are currently delivering less than two submarines per year, he noted.

“We've put billions of dollars into the submarine industrial base over the past few years. And we're putting in a couple of billion more now that the announcement talks about. But the workforce limitations and the supply chain limitations are such that getting beyond two per year is going to be really challenging,” Clark said.

“The submarines it sends to Australia will be coming out of U.S. inventory. There's no way around that,” Clark said.

Long term, he questioned the plan to build the SSN-AUKUS class ships in both the United Kingdom and Australia.

“The idea of building that submarine in the U.K. and in Australia just seems crazy, and an unnecessary waste of resources. But I think that's to satisfy critics in Australia that would say jobs are going to go elsewhere,” he said.

Watson said there are some positives to think about. One of them is widespread bipartisan support the deal has in all three nations.
Niblett said recent U.K. Ministry of Defence strategy documents acknowledged that the United Kingdom was shifting its focus to the Indo-Pacific. It now has a reciprocal access agreement with Japan, for example, and AUKUS “fits into that model of the U.K. now, stepping up alongside the United States to be a trusted partner in what is for America the main security theater for the future, which is not Russia in Europe, but is the Indo-Pacific,” he said.

With the purpose-built submarines not being delivered until the 2040s, their service lives will probably extend 20 to 30 years beyond then, Watson said.

He also noted that defense programs tend not to meet their intended schedules, so the timeline may go much further than that.

“I'm long gone by then. My kids are having kids and their kids are having kids. So, you know, this is a truly momentous announcement and arrangement,” Watson said.

“Now is when the hard work begins,” he added.

Sean Carberry, Laura Heckmann, Josh Luckenbaugh and Stew Magnuson contributed to this story.

Topics: Global Defense Market