Scott Morrison ally helps French lock in $50 billion submarine contract
A long-awaited contract for the $50 billion Future Submarine program will be signed in Canberra on Monday by France and Australia, following months of tough negotiations and the recruitment of a high-powered lobbyist.
The ABC revealed one of Prime Minister Scott Morrisonâs key political confidants was recently hired by the French state-owned shipbuilder Naval Group to help improve a rocky relationship with the Defence department, and to secure a crucial Strategic Partnering Agreement (SPA).
âECG Advisory Solutionsâ, a lobbying firm founded by former Liberal party candidate David Gazard, has been advising Naval Group since last year on how to handle the difficult SPA negotiations with Australia.
Mr Gazard, who was chief of staff to former New South Wales Liberal leader John Brogden, began his friendship with Mr Morrison when he was the Liberal Partyâs State Director for the 2003 election.
In a statement, Naval Group confirmed the arrangement but did not disclose how much Mr Gazardâs company was being paid for its lobbying services.
âAs an integral part of our commitment to the Future Submarine Program, Naval Group is committed to building effective partnerships with the Commonwealth of Australia and Australian industry,â a company spokesperson told the ABC.
âFor that purpose we are seeking external advice.â
Mr Morrison discussed progress on the SPA with French President Emmanuel Macron at the G20 summit in late November, and told reporters they had agreed to elevate it âback up to leader-level to ensure itâs finalised in the near termâ.
It is understood Mr Gazard has since helped the French broker a deal with the Australian government, although ECG Advisory Solutions declined to comment on its role.
French industry groups have described the $50 billion dollar submarine deal with Australia as the âcontract of the centuryâ and the countryâs Defence Minister Florence Parly is flying to Canberra to sign the crucial document.
In 2016 former prime minister Malcolm Turnbull announced Naval Group, then known as DCNS, had beaten rival bids from Germany and Japan to build 12 new submarines for the Royal Australian Navy.
The first of the conventionally powered submarines, to be known as the âAttack Classâ, is scheduled to begin operational service in the mid-2030s.
However last year the ABC revealed that Defence Minister Christopher Pyne had grown so frustrated with the French company over its handling of commercial negotiations, he cancelled meetings with some of its visiting top officials.
In December, Mr Pyne rejected another ABC report revealing that Defence had offered a two-year extension to Naval Group as it tried to lock in the Strategic Partnering Agreement.
Australia will pay France millions if submarine deal collapses
In line with other major defence contracts, Australia will be forced to pay millions of dollars in compensation to France if the future submarine program is terminated, according to the confidential SPA to be signed today.
The ABC has seen a section of the SPA document, prepared last year, detailing at which point certain âbreak paymentsâ will be invoked if Australia decides to walk away from the massive contract.
The Defence Department has confirmed the SPA includes âprovisions to manage termination on a fair and equitable basis, depending on the circumstances leading to terminationâ.
A defence spokesperson told the ABC it would be âinappropriate to discuss the details of commercial arrangements agreed with Naval Groupâ.
Australian Strategic Policy Institute analyst, and former defence official, Michael Shoebridge says break payments are an essential part of large defence contracts.
âPayments in major defence contracts are usual when one of the parties wants to end and not continue the contract,â Mr Shoebridge said.
âItâs usual for major defence contracts to have damages for non-performance.â
âABC
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