Tuesday, March 31, 2020

Dept Of Defence will not end DCNS/Naval Group submarine contracts, despite DCNS threatening non-compliance with terms: Frydenberg naive to believe that DCNS will agree to his call for "hibernation" of business activity,Morrison must show leadership and terminate contracts

by Ganesh Sahathevan

Treasurer Josh Frydenberg wants to put the global economy into a “controlled hibernation”. Picture: Adam Taylor/PMO
Treasurer Josh Frydenberg wants to put the global economy into a “controlled 
hibernation”. Picture: Adam Taylor/PMOSource:Supplied


The ABC reported in February this year:

Relations between the Federal Government and the French company designing Australia's future submarines have hit a new low, with the Defence Minister declaring she will hold the group to account on its local industry commitments.

The Minister's blistering attack followed comments from France-based Naval Group questioning the capability of local suppliers, and suggestions Australian businesses may not get half of the value of contracts under the $80 billion program.

Naval Group Australia chief executive John Davis told The Australian newspaper on Thursday that the company "didn't know the Australian market before we joined the program".

"Now we have a much deeper insight, and we recognise there is a lot more work to be done than we anticipated," he said.

A furious Defence Minister Linda Reynolds expressed her disappointment at the comments and said she would discuss the Government's expectation of strong Australian industry involvement when she met her French counterpart in Europe on Friday.


"I am disappointed by the comments attributed to Naval Group Australia on the Future Submarine Program as they do not reflect the strong collaboration between Naval Group and Australian industry on this program of national significance," Senator Reynolds said in a statement.

Meanwhile the Treasurer Josh Frydenberg is trying to finance his record breaking spending by asking nicely that the rest of the world follow his lead and go into hibernation: 

“Our priority should be putting the global economy into controlled hibernation while quarantine measures are in place,” he said.
“That is, finance the global health response, maintain financial stability, minimise job losses, keep businesses going, and ensure the basic needs of the global population are met.”

That is not going to happen and the rest of the world, including DCNS,will expect payment from the Australian Government whenever it falls due. The Prime Minister Scott Morrison should take charge and end the DCNS/Naval Group dud sub contracts. As explained (see below) Covid-19 may well be a force majeure event that can enable the  Australian Government to terminate the contracts without penalty.

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TO BE READ WITH 


"Generations to come" committed to financing the $230 Billion Wuhan Virus rescue package : Better that Morrison start cutting expenses now, start with the $250 Billion DCNS/Naval Group contracts.


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