"The decision is expected to result in significant savings on the purchase price and associated costs, though he did not specify the amount."
Here is the reformatted article:
AUKUS Proceeds with Revised Submarine Plan and New Drone Project
The trilateral security partnership between Australia, the United Kingdom, and the United States, announced in 2021, is moving forward with a revised plan for Australia’s acquisition of nuclear-powered submarines. The partners have announced a shift to purchase three used Virginia-class submarines from the US, replacing a previous mix of new and used vessels. Alongside this, a new joint project to develop underwater drone technology has been unveiled. The program continues to face scrutiny over production timelines, costs, and strategic objectives.
Revised Submarine Acquisition Plan
Australian Defence Minister Richard Marles announced that Australia will purchase three second-hand Block IV Virginia-class submarines from the United States. This replaces the original plan, which included two used submarines and one new Block V or Block VII vessel. Officials stated the change was made to streamline the acquisition pathway, simplify supply chain management, maintenance, and training, and maximize cost efficiencies.
Marles said the decision is expected to result in significant savings on the purchase price and associated costs, though he did not specify the amount. He added that the overall program cost estimate of A$268–A$368 billion over approximately 30 years remains largely unchanged.
The first used submarine is expected to arrive in Australia in 2032, with subsequent deliveries staggered through 2038. These submarines will serve as a transitional capability until the first AUKUS-class submarines, designed and built jointly by Australia and the UK, are delivered around 2042. Australia is also extending the service life of its six Collins-class submarines to bridge the capability gap, a program now estimated to cost A$11 billion.
US Production Capacity
A key challenge for the program involves US submarine production rates. US shipyards have been producing approximately 1.1 to 1.2 Virginia-class submarines per year, below the target of 2.33 boats per year needed to meet US Navy requirements and fulfill commitments to Australia.
A multi-year procurement contract intended to stabilize production has remained unsigned for 28 months, and the Congressional Budget Office reported that submarine construction timelines have lengthened, with boats now averaging 9-10 years to build.
The US Navy has acknowledged the urgency of increasing production. Admiral Daryl Caudle, Chief of Naval Operations, stated during a Senate hearing that a "transformational improvement" is required to achieve the target delivery pace. Australia has contributed over US$3 billion to support US submarine manufacturing.
UK Program Challenges
A UK House of Commons Defence Committee report published in April 2026 raised concerns about the UK's ability to deliver the SSN-AUKUS submarines on schedule. The report described the program as a "lengthy and complex undertaking" and warned that shortfalls or delays in funding risk failure to deliver on time. UK Defence Minister Luke Pollard stated that changing geopolitical threats make AUKUS delivery more important. The UK has committed £16 billion to the program.
Joint Underwater Drone Project
The three nations announced a new "signature" project under AUKUS Pillar II to develop advanced weapons systems and sensors for autonomous underwater drones. The technology is expected to be operational by 2028, with deployment to warfighters starting in 2027. The project aims to protect critical undersea cables and pipelines, conduct surveillance missions, and strike targets. The UK has committed more than US$170 million to the project.
Independent Inquiry and Criticism
Former Australian Labor minister Peter Garrett is leading an independent community-based inquiry into the AUKUS pact. The five-month investigation will hold public hearings and accept submissions, with a report due by October 30. The inquiry will examine delivery timelines, nuclear waste management, and whether Australia's strategic interests are served by the deal.
Labor MP Ed Husic called for a fresh caucus vote on the agreement, citing changes to the submarine delivery plan and concerns about US reliability. Prime Minister Anthony Albanese and Defence Industry Minister Pat Conroy rejected the call. Shadow Defence Minister James Paterson called for an explanation of the changes and proposed Australia consider acquiring B-21 stealth bombers to address potential capability gaps.
The Australian Greens renewed calls to cancel the agreement. Defence spokesman David Shoebridge argued that the deal makes Australia interoperable with US forces and could draw the country into a US-China conflict, and suggested Australia could acquire conventionally-armed submarines from Japan, South Korea, or Sweden.
Political reactions in the US and Australia have varied. Democratic Congressman Joe Courtney said AUKUS would survive the current administration but described President Trump's criticism of Australia as harmful to the alliance. Former Australian foreign minister Gareth Evans testified at the public inquiry, calling the plan a potential major policy mistake and recommending a fallback plan.
US Congressional Report
A January 2026 report by the US Congressional Research Service (CRS) proposed an alternative "military division of labour" in which submarines intended for Australia would remain under US command and be operated from Australian bases. The report argued that selling submarines to Australia could convert them from assets available for a US-China crisis into assets that might not be available if Australian-commanded submarines were not ordered into operation. It also cited Australia's statements regarding no commitment to support the US in a Taiwan-related conflict. The CRS report also presented arguments for upholding the existing AUKUS arrangement, including sending a signal of collective determination to China.
Strategic Context
Australia's 2026 National Defence Strategy outlines an additional A$53 billion in defence spending over the next decade, reaching 3% of GDP. The strategy maintains a defensive posture aimed at preventing military action against the country. The document discusses the AUKUS program but does not provide a new strategic narrative for it.
A Chinese naval flotilla's circumnavigation of Australia in 2025, including live-fire exercises in the Tasman Sea, was cited by Australian defence officials as contributing to increased defence spending. Australia's Chief of Navy, Vice Admiral Mark Hammond, stated the flotilla caused "anxiety" in Australia.
Infrastructure Development
Australia is investing in infrastructure to support the submarine program. Upgrades at HMAS Stirling near Perth are underway to accommodate US and UK nuclear-powered submarines, with rotations scheduled to begin in 2027. A US submarine base at Stirling has been described by some analysts as a key element of the agreement. A submarine construction yard at Osborne, South Australia, is being developed for building AUKUS-class submarines, with an investment of A$30 billion announced by the Australian government. Australia's Chief of Navy confirmed he was directed to speak at an AUKUS conference in Washington, later clarifying the government approved his address.