Military aircraft cost blowout unacceptable
26 June 2008
Military aircraft cost blowout unacceptable: Greens
Green Party MP Keith Locke is concerned at the lack of accountability by the Ministry of Defence and Defence Force regarding cost blowouts of almost $400 million on key defence projects, identified in an Auditor General's report released today.
The report revealed that a single item on the military shopping list - the purchase of eight NH90 helicopters to replace 14 ageing Iroquois helicopters - had blown out by more than $220 million, while other items of military hardware also had significant cost overruns from initial projections.
"It is unacceptable that the purchase cost for eight NH90 helicopters blew out from the upper limit of $550 million when the Cabinet decided to commence the acquisition to $771.2 million before the contract was signed," Mr Locke, the party's Defence Spokesperson, says.
The cost of an Orion aircraft communication and navigation upgrade also ballooned by $91 million, increasing from an estimated $282 million to a final figure of $373 million.
"All this happened without the necessary information or justification being available which is why the Auditor General's audit of 10 Defence acquisitions (including the helicopter and Orion projects) could not be completed," Mr Locke says.
"With the agencies unable to provide the proper information how can we be certain that we are seeing the whole picture? With the total blowout for just these top 10 projects being almost $400 million, it worries me what is going on with the other purchase projects the agencies are involved in," Mr Locke says.