Australia signs $1.4 billion deal to upgrade navy submarines

SYDNEY (Reuters) - Australia said on Saturday it had signed a A$2.2 billion ($1.4 billion) four-year contract with state-owned submarine builder ASC to upgrade the navy's Collins class submarines.

The "sustainment contract" is part of a government pledge to keep the diesel-electric powered Collins-class fleet "a potent strike and deterrence capability", Defence Industry Minister Pat Conroy said in a statement.

The contract will be "directly ensuring job security for more than 1,100 highly skilled workers", with the work carried out in the towns of Henderson in Western Australia and Osborne in South Australia, Conroy said.

Osborne is where ASC and Britain's BAE Systems will jointly build Australia's fleet of nuclear-powered submarines, the core component of the 2021 AUKUS pact between Britain, the U.S. and Australia.

Until that work begins later this decade, the shipyard is where much of the maintenance is performed on the existing Collins-class fleet.

Conroy said it was part of the centre-left government's A$4 to A$5 billion commitment to the submarines, which are planned to operate into the 2040s.

($1 = 1.5272 Australian dollars)

(Reporting by Sam McKeith in Sydney; Editing by William Mallard)