Australia to Review NH90 Program, Cancels Watercraft

Minister for Defence Stephen Smith and Minister for Defence Materiel Jason Clare today updated the Projects of Concern list, announcing the cancellation of the LCM2000 Watercraft project.

LCM 2000 Watercraft

This project was approved by the previous Government in 1997 and involved the construction of six watercraft for the Landing Platform Ships Kanimbla and Manoora.

The project has suffered a number of problems. Most critically, the dimensions and weight of the watercraft meant they were unsuitable to be launched from these ships and are not fit for alternative Australian Defence Force use.

Accordingly, the project has been canceled and Defence will now begin plans to dispose of the vessels.

MRH-90 Helicopter

Mr Smith and Mr Clare also announced that a high-level comprehensive diagnostic review of the MRH-90 helicopter project would occur this month.

As reported in both the Defence Annual Report and the ANAO Major Project Report released last year, the project has suffered delays of 12 months for the Navy’s helicopters and 18 months for the Army’s helicopters.

Delays are due to a series of key issues, including engine failure, transmission oil cooler fan failures and the poor availability of spares.

The former Government approved the order of 46 MRH-90s to replace the Army’s Black Hawk and Navy’s Sea King fleets.

13 MRH-90 helicopters have been accepted by Defence to date and are currently being used for testing and initial crew training.

Minister Smith said that the full diagnostic review would be supported by external specialists. It will provide recommendations to Government on the actions necessary to fully implement this important project.

Projects of Concern:

The Projects of Concern list was established by the Government in 2008 to focus the attention of Defence and Industry on remediating listed projects.

This process has been successful in remediating a number of key complex and challenging projects.

Projects are put on the list when there are significant challenges with scheduling, cost, capability delivery or project management.

Since September 2010, the Government has added two projects to the list (Electronic Support Measures upgrade for AP-3C Orion aircraft and Joint Air to Surface Standoff Missiles).

This brings the total number of projects placed on the list since 2008 to 18. Seven of these have been removed – five due to remediation and two due to cancellation.

Later this month the Minister for Defence Materiel will meet with the CEOs of companies who have projects on the list to discuss their plans to remediate the projects.

These meeting will now occur twice a year to ensure there is a focus at the top of Government, Defence and industry to remediate these projects and ultimately take them off the list.

Minister Clare also indicated he was developing plans to further strengthen the Project of Concern process. These reforms will be released in the next few weeks.

The current Project of Concern list is below.

Project/ Description

• -- CN10: Collins Class Submarine Sustainment and Projects
• -- AIR 5077: Phase 3, ‘Wedgetail’ Airborne Early Warning and Control aircraft
• -- SEA 1448: Phase 2B, Anti-Ship Missile Defence radar upgrades for ANZAC Class Frigates
• -- JOINT 2043: Phase 3A, High Frequency Modernisation (HFMOD) – communications and data exchange capability for sea, air and land forces
• -- AIR 5333: ‘Vigilare’ – Aerospace surveillance and command and control system
• -- JOINT 129: Phase 2, Tactical Unmanned Aerial Vehicles – airborne surveillance for land forces
• -- LAND 121: Phase 3, ‘Overlander’ replacement field vehicles, trailers and modules for land forces (‘Medium Heavy’ class of vehicles only)
• -- JOINT 2070: Lightweight torpedo replacement for ANZAC and ADELAIDE Class Frigates
• -- AIR 5402: Multi-Role Tanker Transport aircraft – Air to Air Refuelling Capability
• -- AIR 5276: Phase 8B, Electronic Support Measures upgrade for AP-3C Orion aircraft
• -- AIR 5418: Phase 1, Joint Air to Surface Standoff Missiles