Australia announced on Sunday that it will spend A$3.9 billion ($2.76billion) to advance construction of a shipyard which will deliver nuclear-powered subs under the trilateral AUKUS defense pact with the U.S. and?Britain.

AUKUS, announced in 2021, is Australia's biggest-ever defence investment. U.S.-commanded Virginia class submarines will be based in Australia by 2027. Several Virginia submarines will be sold to Australia around 2030. Britain and Australia are building a new AUKUS nuclear powered submarine.

Anthony Albanese, the Australian Prime Minister, described the A$3.9billion as a downpayment for the construction of a new shipyard in Osborne in South Australia.

"Investing in the submarine construction ?yard at Osborne is critical to delivering Australia's conventionally-armed, nuclear-powered ?submarines," Albanese said in ?a statement.

He said that official projections place the cost of construction at A$30 billion over the next decade.

Osborne will be the site where Australia's ASC, and Britain's BAE Systems, will build Australia's fleet nuclear-powered subs. This is the core component of the AUKUS agreement. The shipyard will be the place where the majority of the maintenance work on Australia's Collins-class submarine fleet is done until the project begins later in the decade.

Peter Malinauskas, Premier of South Australia, said that the money would be used to build infrastructure for the shipyard. Malinauskas stated, "This is only the beginning."

A Pentagon review of AUKUS in December found that there were areas where the deal could be put on the "strongest footing possible," such as ensuring Australia moves quickly enough to build up its nuclear submarine capability. Sam McKeith, Sydney (Reporting and Editing by Jamie Freed).

(source: Reuters)