Submarine fleet expected to be cheaper

The navy's new submarine fleet could reportedly cost taxpayers at least $5 billion less than expected, secret price estimates given to Defence by three international competitors show.

The confidential bids lodged by Germany, France and Japan offer a much lower cost of building an eight-submarine fleet in Adelaide than was anticipated, The Australian newspaper reported on Saturday.

The savings are in the range of $10 billion to $12 billion, when it was previously expected the project would cost about $20 billion, based on a 12-boat fleet.

Even if the government decides to build 12 submarines instead of eight, the bidders estimate the cost will reach only about $15 billion - a potential $5 billion saving.

The lower cost estimates reflect the competition between bidders to secure the deal.

The government says it will choose the winning bidder by mid-2016.