Late and costly - 28 defence projects falling behind

The federal government has released an audit of major defence projects which shows big slippages in delivery schedules and major cost over runs.

The government put a positive spin on the figures saying that it was ‘moving to rectify significant and systemic issues in the delivery of crucial Defence capabilities’.

However this is difficult to reconmcile with the facts released by defence minister Richard Marles from the Australian National Audit Office and advice from the Department of Defence.

Projects with approved budgets totalling more than $69 billion – are facing significant schedule delays and budget variations – 28 are a combined 97 years behind schedule and at least 18 projects are running over budget and at least $6.5 billion of variations from the approved budgets identified.

These projects include:

$44 billion Hunter Class Frigate program – start of construction delayed by four years and a $15 billion increase in expected costs, hidden from the public by the Coalition government
$1.4 billion C-27J Spartan Battlefield Airlifters – which were delivered four and a half years behind schedule and are unable to fly into battlefields
$3.7 billion Offshore Patrol Vessel project – running one year behind schedule
$356 million Evolved Cape Class patrol boats – running nearly a year late
$970 million Battlefield Command System – three years behind schedule
Ans several Defence Satellite Communications projects worth $906 million – running between two and four years behind schedule

In a statement the government said the underperformance of Defence projects was ‘due in no small part to the chaotic administration of the Defence portfolio by the former Coalition Government’.

Marles said: “The Morrison Government’s investment in defence saw key projects blow out in both cost and time.

“Money was being flushed down the toilet while the former government regaled in how much they were spending on defence.

“We face the most challenging strategic circumstances since the Second World War – this, along with the serious pressures facing the economy mean we need to be more responsible about how we manage critical projects, particularly as we reach record spending within Defence as a per cent of GDP.”

Marles said the government needed to be better focused on the quality of spending within defence to ensure ADF personnel had the best capability.

“It’s not as though we can go onto the battlefield and overwhelm our adversary by waving a copy of the budget papers in their face.”

Marles acknowledged that defence projects were complex undertakings at the cutting edge of technological, engineering and industrial capability and inevitably involve risk.

To bring the issues raised under control the government announced:

Establishing an independent projects and portfolio management office within Defence
Requiring monthly reports on Projects of Concern and Projects of Interest to the Minister for Defence and Minister for Defence Industry
Establishing formal processes and “early warning” criteria for placing projects on the Projects of Concern and Projects of Interest lists
Fostering a culture in Defence of raising attention to emerging problems and encouraging and enabling early response
Providing troubled projects with extra resources and skills
And convening regular Ministerial summits to discuss remediation plans.