Chapter Two - Capital Budget > Major Capital Investment Program
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Major Capital Investment Program (+$194m)

All up, Defence expended some $3,323m on the major capital investment program which was $410m more than the original budget and $194m more than the revised estimate. This included start-up expenditure on a range of new projects that were approved during the course of the 2004-05 financial year which, following approval, were transferred to the Defence Materiel Organisation for their acquisition phase.

Defence Capability Plan

The Defence Capability Plan is a detailed, costed plan for Australia's military capabilities over a ten-year period, with broad guidance on major investments over the following ten years. The plan is reviewed regularly to take account of changing strategic circumstances, new technologies and changed priorities. The plan sets out the planned investment in new equipment under six capabilities goals - land forces, air combat, maritime forces, strike, information, and intelligence capability.

Between the period when the Defence White Paper 2000 was announced in December 2000 and 30 June 2005, the Government had approved more than 140 major projects or phases of projects with an approximate cost of $21.2 billion. The Government will be presented with further projects for consideration in 2005-06.

During the course of 2004-05, 26 projects at a cost of $2.5 billion were approved by the Government. A list of the acquisition projects approved by the Government in 2004-05 is provided in Table 2.2 below.

Table 2.2 List of Major Capital Equipment Projects Approved by the Government in 2004-05 (1) (2) (3)
Project No Phase Name Approval
Budget
(Band $m)		 Status as at
30 June
2005
Support to the development of the Major Capital Equipment Program
    Capability Technology Demonstrators (2004) 10 to 20 Various
    Capability Technology Demonstrators (2005) 20 to 30 Various
    Project Development Funding 10 to 20 Various
First Pass and Pre-First Pass Approval
AIR 5276 Phase 8B AP-3C Electronic Support Measures Less than 10 Study
AIR 5418 Phase 1 Follow-on Stand-Off Weapon 10 to 20 2
JP 126 Phase 2 Joint Theatre Distribution System Less than 10 4
JP 129 Phase 2 Airborne Surveillance for Land Operations Less than 10 2
JP 2048 Phase 4A/4B Amphibious Deployment and Sustainment - Risk Reduction Activity Less than 10 Study
JP 2089 Phase 2A Tactical Information Exchange Domain (F/A-18 Hornet) Less than 10 Various
LAND 58 Phase 3 Weapon Locating Radar Life of Type Extension Less than 10 4
LAND 146 Phase 1 Combat Identification for Land Forces Less than 10 Various
SEA 4000 Phase 1D Air Warfare Destroyer Aegis study 10 to 20 Study
SEA 4000 Phase 2 Air Warfare Destroyer - Design Activity 450 to 600 2
Second Pass Approval
AIR 5276 Phase 4 AP-3C Electronic Warfare Self Protection 30 to 50 1
AIR 5376 Phase 2.4 The Hornet Target Designation System 100 to 150 2
AIR 9000 Phase 2A Additional Trooplift Helicopters 750 to 1,000 1
AIR 9000 Phase 5A Chinook Upgrade - Early Engine Replacement 50 to 70 2
JP 2060 Phase 2B Deployable Health Capability 50 to 70 4
LAND 125 Phase 2B Soldier Enhancement Version One - Acquisition 30 to 50 2
SEA 1390 Phase 4B FFG Standard Missile-1 (SM-1) Replacement 450 to 600 3

Notes

  1. This list excludes highly classified projects.
  2. This list includes a number of projects that were originally planned for approval in 2002-03 and 2003-04.
  3. This list excludes a number of projects that support the development of the new major capital equipment program, such as the Rapid Prototype, Development and Evaluation Project.

Key to Project Status Categories

1. Project under way (contract signed).
2. Tender closed.
3. Out to tender.
4. Yet to go to tender.
Various: Either contributing to more than one project or consisting of several internal phases of varying status
Study: Project risk/industry etc study

Approved Major Capital Equipment Program

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. The Defence Materiel Organisation manages the approved major capital investment program.

Projects costing between $8m and $50m are 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.

Total expenditure including on the newly-approved projects outlined above totalled $3,323m or $194m more than the revised estimate.

An overview of the top 30 projects in the approved major capital equipment program can be found in Chapter Six - Defence Materiel Organisation in Table 6.1.
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