Air Warfare Destroyers: Private contractors enlisted to help bring defence shipbuilding contract on schedule

Updated

Australia's most costly defence shipbuilding project is running up to three years late and hundreds of millions of dollars over budget.

The Federal Government has enlisted private contractors to try to bring the troubled $8.5 billion Air Warfare Destroyer back on track.

Finance Minister Mathias Cormann and Defence Minister David Johnston announced that "immediate improvements" would be driven by experts from companies BAE Systems, Navantia SA and Raytheon Australia.

The increased roles of the contractors would be for an "interim period".

"The schedule overruns are closer to 30 months for ships 1 and 2 and about three years for ship 3, and the work that is to be done over the interim period between now and the end of July 2015 will focus on really putting a final number on the actual cost overruns," Senator Cormann said.

The Defence Minister, who last month said he would not trust the government shipbuilding company to "build a canoe", also announced the establishment of a "sovereign submarine industry".

However, details on how the industry would be sovereign were not revealed, including whether it meant submarines could be built in Australia or maintained here.

"In the near future there will be further announcements as to exactly the nuts and bolts and mechanics of precisely what we intend for that," Senator Johnston said.

"But may I say this is a very important, front-of-mind issue for myself and for the Government."

The Government has been under pressure to stick to its election promise to build 12 new submarines in Adelaide, amid speculation it will instead commission a Japanese firm to build the vessels.

Senator Cormann said no decisions had been made in relation to procurement around submarines.

The Defence Minister said the decision would be "dominated by our need to avoid a capability gap".

"And the pathway will come forward in due course and you'll see it all very clearly laid out then."

A spokesman for South Australia's defence industry welcomed the announcement saying it would restore confidence in the program.

Chris Burns from the Defence Teaming Centre said it was time to stop speculating and start working.

"We see this as a positive move and the first positive move for some time now," he said.

"It's time to stop dwelling on the past and speculating on delays and cost overruns and get on with building the ships and improving the productivity."

Air Warfare Destroyer Alliance chief executive Rod Equid also welcomed the move, saying the injection of additional expertise would ensure the project's success and set the basis for future naval shipbuilding work in Australia.

"We are entering a new phase of productivity and collaboration and we will embrace change and demonstrate marked improvements over the coming months," he said.

Topics: federal-government, government-and-politics, parliament, navy, defence-forces, australia, sa

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