Five months after the $90 billion French submarine program was dumped, 10 Australian defence employees remain in the shipbuilding city of Cherbourg completing "final closure activities".
In September last year, the federal government scrapped the controversial Attack-class submarines in favour of the new AUKUS partnership, which seeks to acquire a nuclear-powered fleet.
Around $2.4 billion was spent on the aborted program with France's Naval Group company, which was meant to deliver up to 12 submarines to replace the ageing Collins-class fleet.
While officials continue to negotiate the formal termination of the massive contract, the ABC can reveal a third of the "Defence resident project team" remains in Cherbourg.
At the time of Australia's AUKUS announcement, there were 33 Department of Defence personnel in Cherbourg, but 23 have since returned to Australia.
"These members are supporting the closure of program activities in Cherbourg, having completed the handover of Hughes House to Naval Group in December 2021," a Defence Department spokesperson said.
"All but two are scheduled to return to Australia by the end of March 2022, with the last remaining members due to return to Australia in June 2022 on completion of final closure activities."
A defence insider, who spoke to the ABC on the condition of anonymity, claimed many of the families living in Cherbourg were not in a hurry to return home and were taking advantage of travel opportunities in Europe while still on their postings.
At a Senate estimates hearing late on Thursday, the Defence Department's deputy secretary in charge of naval shipbuilding, Tony Dalton, confirmed negotiations on the cost settlement to terminate the French project were "ongoing".
"It's a complex and sensitive process that we've been working our way through pragmatically and cooperatively with both Naval Group and Lockheed Martin Australia – the two prime contractors that were involved in the Attack-class submarine program".
Mr Dalton said Defence was "close to finalising the arrangements" with Lockheed Martin Australia, the American-owned company selected as the combat system integrator for the now dumped Attack-class submarines.
"We are making significant progress with Naval Group in working our way through both agreeing the transition out plan which we have done, and then working our way through the termination of the strategic partnering agreement and the submarine design contract".
Lilian Brayle, the Naval Group executive appointed last May to oversee the Australian Future Submarine Program has flown to Australia this week to discuss the termination process.
Asked by Labor senator Kimberley Kitching if the settlement could be concluded by the end of this financial year, Mr Dalton responded "we're going to do everything we possibly can".
