Chapter Four > Approved Major Capital Equipment Program > Top 20 projects by 2003-04 Expenditure

Approved Major Capital Equipment Program (+$286.6m)

Remaining Top 20 Projects by Total Approved Project Cost

Fourteen of the top 20 projects by total approved project cost are also in the top 20 projects by actual 2003-04 expenditure. As such, those 14 projects have been reported in Table 4.2 and detailed on the ensuing pages. The table below provides details of the remaining six projects in the top 20 by total approved project cost, not already reported at Table 4.2.

Table 4.3 Remaining Top 20 Projects by Total Approved Project Cost
  Approved Project Cost(1) Cumulative Expenditure(2) 2003-04 Budget Estimate(3) 2003-04
Revised Estimate(4)
2003-04 Actual
  $m $m $m $m $m
ADF Air Refuelling Capability 1,771 1 3 3 1
Strategic Airlift Capability 1,041(5) 969 13 9 6
Lead-in Fighter Capability 1,020 938 24 20 12
New Submarine 5,119 5,060 23 19 21
Armidale-class Patrol Boat 455 23 30 12 19
Electronic and Weapon Systems
High Frequency Modernisation 595 275 14 10 5


  1. December 2004 prices.
  2. Cumulative expenditure to 30 June 2004.
  3. December 2002 prices.
  4. January 2004 prices.
  5. The reduction in the approved project cost was as a result of a real cost decrease of $49m approved by Government in January 2004.

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ADF Air Refuelling Capability

Substantially Achieved

Preferred tenderer: European Aeronautic Defence and Space Company with Qantas Defence Services

This project will provide five new generation tanker aircraft and through-life support services including engineering, maintenance, spares, technical data, software and training support for the new fleet.

The evaluation of tenders and selection of the preferred tenderer occurred on schedule. The Military Transport Aircraft Division of the European Aeronautic Defence and Space Company, teamed with Qantas Defence Services, has been announced as the preferred tenderer for the supply and through-life support of five Airbus A330 multi-role tanker transport aircraft. The project office has successfully undertaken tender development activities with the preferred tenderer, European Aeronautic Defence and Space Company and Qantas Defence Services, as a risk mitigation strategy ahead of formal contract negotiations, which commenced in early August 2004. The awarding of the acquisition and through-life support contracts is planned for later in 2004.

The lower than expected expenditure in 2003-04 was due primarily to some project administrative costs not occurring as originally planned.

This project contributes to Air Force capability.

Strategic Airlift Capability

Substantially Achieved

Prime contractor: Lockheed Martin

Twelve C-130J-30 Hercules aircraft were delivered in 1999-2000 to replace the C-130E aircraft. The fleet is now fully integrated into the Air Lift Group. A role expansion program has certified the aircraft for the roles of air logistics support, paratroop drop, search and survivor assistance, Papua New Guinea operations and restricted medical evacuation.

Interim in-service support contracts are in place, but are progressively being replaced by long-term in-service support contracts developed during 2003-04. These contracts will deliver training, engineering support, propulsion system repair and overhaul and aircraft deeper maintenance for the C-130J-30 fleet and are all expected to be in place in 2005.

The purchase of spares necessary to support the fleet was largely completed in 2003-04.

Defence and the United Kingdom's Ministry of Defence, are continuing a long-term venture involving full-scale fatigue testing of the C-130J wing assembly and a modified C-130K fuselage.

The lower than expected expenditure in 2003-04 was due primarily to the decision to suspend the purchase of mobile engine test stands as they may now be provided under a proposed Propulsion Systems Support Contract.

This project contributes to Air Force capability.

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Lead-in Fighter Capability

Partially Achieved

Prime contractor: BAE Systems

This project involves the acquisition of 33 Hawk 127 aircraft to perform lead-in fighter and ADF support roles. Aircraft delivery was completed in October 2001. The full contracted capability for radar simulation and radar emulation functions that are required for the ADF support role has been delayed due to difficulties with the proposed design solutions. The initial radar emulation capability is expected to be achieved in the third quarter of 2005. The initial radar simulation capability is also planned for 2005.

Planned expenditure in 2003-04 was only partially achieved, primarily due to delays with the design solution for the radar emulation pods.

This project contributes to Air Force capability.

New Submarine


Prime contractor: Australian Submarine Corporation

The new Collins-class submarines provide a conventional submarine capability with long endurance and stealth capability. All six submarines have been delivered. Chief of Navy approved 'operational release' of the class in February 2004, which acknowledges the submarine's ability to achieve defined operational outcomes laid down in Defence's preparedness documentation. Intellectual property issues with the submarine designer, Kockums, have been resolved, as have outstanding claims between Defence, the Australian Submarine Corporation and Kockums.

Expenditure for 2003-04 was in line with the revised estimate.

The project contributes to Navy capability.

Armidale-class Patrol Boat


Prime contractor: Defence Maritime Services (ships being built by Austal Ships)

This project will deliver 12 Armidale-class patrol boats to replace the ageing Fremantle-class patrol boats. The patrol boats will make a critical contribution to coastal surveillance and enforcement capability. The preferred contractor was announced in August 2003, and the contract was signed on 17 December 2003. The contractor will also provide through-life support for the Austal-designed-and-built boats under the single contract. This will link the acquisition and support to provide required levels of availability for a minimum 15-year operating term. In total, the new vessels will provide a capability for the Navy to achieve up to 3,000 available days per year for Coastwatch and ADF support operations, plus a surge capacity of up to 600 additional available days per year. The new boat will be larger than the Fremantle-class and will be capable of operating in higher sea states.

The project is currently running on schedule and on budget. Following preliminary and detailed design reviews, cutting of aluminium commenced in May 2004 and fabrication of the first hull is assessed as being on target for a January 2005 launch and a May 2005 delivery.

Annual expenditure exceeded the revised estimate due to early achievement of a contracted milestone.

This project contributes to Navy capability.

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High Frequency Modernisation

Not Achieved

Prime contractor: Boeing Australia Ltd

The High Frequency Modernisation project will replace Navy high frequency radio stations in Canberra, Darwin, Exmouth, Sydney, Cairns and Perth, and Air Force high frequency radio stations in Sydney, Townsville, Darwin and Perth. The new network will provide enhanced high frequency radio communications capabilities and compatible high frequency radio equipment in selected ADF mobile platforms.

The project will deliver the new capability in two stages. The first stage will replace the existing facilities. The second stage will build on the first stage and provide increased levels of automation, improved capability, enhanced security and survivability, and reduced reliance on operating staff, and incorporate the new equipment into mobile platforms.

Completion of integration, system-testing and acceptance of the first stage system, originally scheduled for the second half of 2002 and then rescheduled for late 2003-04, was not achieved due to continuing delays by Boeing Australia in software development and integration. Delivery is now scheduled to occur in the third quarter of 2004, with contract acceptance to follow two months after delivery. The transition of the Navy and the Air Force's radio network operational capability and staff to the new integrated system is now scheduled for the fourth quarter of 2004. The second stage will be introduced progressively between 2005 and 2008 with installation into mobile platforms potentially extending to 2010.

Because of the delays, the contract baseline was renegotiated in early 2004 to provide more achievable targets. As part of the negotiations for the revised contract baseline, the contractor provided compensation to Defence. The contract delays are reflected in the lower than expected expenditure in 2003-04. The total approved project expenditure increases by $10m due to variations in price indices and exchange rates.

This project contributes to Command of Operations capability.


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