LONDON — The AUKUS trilateral program to equip Australia with nuclear submarines moved ahead on March 21 with an announcement that BAE Systems and ASC Pty will lead the industrial team being formed to build the boats.

The mega deal involving the two companies is slated to produce a BAE-designed fleet of nuclear attack submarines for Australia by the early 2040s under the Australian-British-U.S. initiative.

Per the AUKUS agreement, Australia and the U.K. will eventually operate a common class of nuclear submarines, incorporating technology from all three nations. The boats will be based on Britain’s next-generation design, now in its its early stages at BAE.

The U.S. Navy will supply Australia with three Virginia-class submarines, maybe more, as an interim measure ahead of delivery of any Anglo-Australian boats.

The announcement of the industrial tie-up was made by Richard Marles, Australian deputy prime minister and defense minister, during a visit by British Defence Secretary Grant Shapps.

The two ministers signed a new defense and security pact on the previous day, which among other things will make it easier to facilitate U.K. submarine crews visiting Australia as part of the AUKUS partnership.

BAE Systems and ASC, Canberra’s builder and maintainer of conventional submarines, will initially work together under a collaborative arrangement in Australia before formalizing to a more long-term joint venture.

BAE Systems chief executive Charles Woodburn said work on delivering the new class of submarine, known as the SSN-AUKUS, was already well underway in the UK.

“We’re already making good progress on the design and development of the next-generation submarine in the UK where we have more than 1,000 people working on the SSN-AUKUS program and major infrastructure investment underway,” said Woodburn.

The British shipbuilder already has experience working with the Australian maritime industry and navy. The company is currently building a fleet of anti-submarine frigates for the Australian sea service based on its Type 26 design.

SSN-AUKUS will start to replace the Astute class, which BAE is currently building at its site in Barrow-in-Furness in the northwest of England, from the late 2030s.

The industrial tie-up announcement follows a nearly £4 billion ($5 billion) contract award to BAE by the British government for the next phase of the joint submarine program last October.

The funding covers development work through to 2028, enabling BAE to progress the detailed design phase of the program and procure long-lead items.

The award also funds significant infrastructure investment in Barrow, which will see the site’s facilities double in size from 80,000 to 160,000 square meters by the late 2030s.

The MoD termed the arrangement a “monumental success” for British industry.

BAE has already increased its U.K. submarines workforce to 13,500, and there are plans to grow to that number to around 17,000 at its peak to support SSN-AUKUS and other nuclear vessels.

Andrew Chuter is the United Kingdom correspondent for Defense News.

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