Chapter Four > Approved Major Capital Equipment Program

Approved Major Capital Equipment Program (+$286.6m)

The Defence Materiel Organisation manages the approved major capital investment program. Following project approval, new projects are transferred from the Defence Capability Plan to the Defence Materiel Organisation for their acquisition phase.

The approved major capital equipment program is comprised of those projects that generally cost in excess of $20m and which, following approval, are transferred from the Defence Capability Plan to the Defence Materiel Organisation for their acquisition phase. Until 2003-04, projects costing $20m or more required approval by the Government. Following implementation of the new 'two pass' approval process as part of the implementation of the Defence Procurement Review, the Government approval threshold has been increased to $50m. Projects costing between $8m and $50m (formerly $8m to $20m) are now approved jointly by the Ministers for Defence, and Finance and Administration. Projects costing less than $20m are generally categorised as minor capital projects and are part of the other capital purchases category, although individual project phases within the Defence Capability Plan, such as studies, can cost less than $20m. For more detail on the 'two pass' implementation process, refer to Chapter One - New Capability Development and Acquisition Process.

After allowing for the $500m which was reprogrammed in the 2004-05 Budget, and the subsequent decision to bring $170m of this amount forward to 2003-04 to enable the payment of the deposit for the two additional early warning and control aircraft, total expenses in the approved capital program in 2003-04 were $286.6m higher than forecast. The reasons for the other increases include the HMAS Westralia replacement ($54m), the initial deposit on the Main Battle Tank Replacement project ($5m), and an earlier than anticipated payment for the Joint Strike Fighter ($28m).

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Table 4.2 and accompanying descriptions provide details of the approved project cost, cumulative expenditure to 30 June 2004 and actual expenditure for 2003-04, of the top 20 (by 2003-04 expenditure) major capital equipment projects for Defence.

Table 4.2 Top 20 Projects by Actual 2003-04 Expenditure
  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
Aerospace
Airborne Early Warning and Control 3,426 1,554 516 359 528
Armed Reconnaissance Helicopter 1,894 425 526 400 285
F/A-18 Hornet Upgrade 1,516 614 125 70 81
Anzac Ship Helicopter 998 889 60 41 39
P-3C Update Implementation 902 793 59 47 36
Maritime
Anzac Ship Project(5) 5,352 4,882 226 220 220
FFG Upgrade Implementation 1,442 911 120 109 102
Collins Combat System 433 81 85 54 54
Maritime Operations Support Capability 141 54 n/a(6) 47 54
Collins-class Reliability and Sustainability Improvements 359 114 50 37 39
Evolved SeaSparrow Missile 270 174 88 39 34
Underwater and Surface Warfighting Upgrade Program 154 90 40 28 31
Mine Hunter Coastal Acquisition 1,257 1,115 45 27 30
Land
Australian Light Armoured Vehicles 666 472 171 151 155
Upgrade of M113 Armoured Vehicles 566 137 26 26 30
New Air Combat Capability
Joint Strike Fighter 205 66 36 29 56
Electronic and Weapon Systems
Explosive Ordnance Reserve Stocks 193 51 n/a(7) 50 51
Lightweight Torpedo Replacement(8) 307 84 55 53 43
Jindalee Operational Radar Network 1,238 1,095 45 37 40
Air-to-Surface Stand-off Weapon Capability 438 329 68 30 29

Notes

  1. December 2004 prices.
  2. Expenditure to 30 June 2004.
  3. December 2002 prices.
  4. January 2004 prices.
  5. Project approval, expenditure and estimate figures are the net cost of the 10-ship program after deducting New Zealand revenue.
  6. Project not approved at time of Budget Estimates.
  7. Project not approved at time of Budget Estimates.
  8. This project was previously reported in the portfolio additional estimates statement under Maritime projects.

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