Apparently, one of the issues that "torpedoed" the submarine deal between Australia and France was concern over the lack of performance provided by the design, in addition to the rapidly escalating costs for the program:
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From what I've read, the original contract was estimated to run about $36 USDAus Billion, but the latest estimate was as high as $90 USDAus Billion for 12 submarines, and no doubt, expected to climb even more, since the first keel hasn't even been laid down yet (that was planned to start in 2023)
My guess is, given the increasing need to counter China's rising seapower in the region, as well as the rapidly escalating costs of the French conventional sub offering, the Australian military and government decided to pull the plug on their "deal".
No doubt, they determined it would be possible to get a nuclear powered sub for about the same price, or less (possibly a bit more – depending upon the final costs for both projects, ultimately) than that of the far less capable conventional subs being offered by France. Given the size of Australia and the area(s) to be patroled (the Pacific is very large), nuke subs make far more sense than conventional, or even advanced AIP subs. That is especially true if they need to provide aid and support to Taiwan, Japan, and the USA in the region.
Here's info on the capabilities of the planned Attack class sub, that has now been canceled:
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SSNs provide the ability to cruise for long periods of time at very fast speeds in order to get to their assigned area of operations, and don't need to snort in order to recharge their batteries. Once on station, they can patrol much more stealthily and slowly, if desired.
Conventional subs are very vulnerable to detection and attack when snorting, and even AIPs have to do so occasionally, though far less often.
As we saw in the Falklands War, the Royal Navy's nuclear attack subs were able to get to their patrol areas in the South Atlantic much more quickly than would have been possible with a conventional, or AIP sub. Clearly, having this capability for the Australian Navy would be a big plus too, given the very large size of the continental island's perimeter, as well as adjoining waters that may need to be patroled too in time of war, or increasing tensions.
It will be interesting to see what design will be chosen or produced for Australia, given that this is a Aus/UK/US deal, and whether it/they will be a pure UK/US design, or a mix of the two.
I'd love to see them get some Seawolf SSNs, since even the USA only has three of them (due to their high costs, and short-sighted decision-making), but my guess is that is too much to hope for, given their high costs.