Johnston Says AWD Programme in 'Deep, Deep Trouble'

16 Agustus 2014

Australia's Air Warfare Destroyer project has suffered from delays and budget over-runs (photo : Aus DoD)

Australia's AUD8.5 billion (USD8.25 billion) Air Warfare Destroyer (AWD) project, the country's largest current defence programme, is in "deep, deep trouble", according to Defence Minister David Johnston.

In remarks reported in The Australian newspaper on 15 August and confirmed to IHS Jane's by the minister's office, Johnston also called the programme "a disgraceful mess".

"The AWD will be one or two years late if we are lucky and several hundred millions over budget," the minister said. "People are not wanting to be frank about how bad this project is."

The AWD project was placed on the government's Projects of Concern (PoC) list on 4 June after an independent review headed by former US Navy Secretary Don Winter. The review identified inadequate government oversight and also questioned the management abilities of the AWD Alliance, which groups government-owned shipbuilder ASC, the Defence Materiel Organisation (DMO), and systems integrator Raytheon.

An earlier Australian National Audit Office (ANAO) report said that the over-budget cost of the project, established in 2007, was likely to be significantly higher than the AUD302 million forecast late in 2013.

The Australian article referred to additional costs estimated at AUD150 million, but this was not confirmed by the minister's office and the AWD Alliance could not be contacted.

The government said on 4 June that emergency measures would include the urgent insertion into ASC of an experienced shipbuilding management team, and IHS Jane's understands this will come from BAE Systems. The minister's office said an announcement could be expected "quite soon".

Under the current schedule, the first of the three 7,000-tonne Hobart-class AWDs will not be delivered to the Royal Australian Navy (RAN) until March 2016, the second in September 2017, and the third in March 2019.

It was not immediately clear whether Johnston was referring to new delays, or to the fact that the current delivery dates represent delays of 15, 18 and 21 months respectively on the original schedule, which was re-baselined in September 2012.

(Jane's)