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Release of the Coles Review

Hon Phil Goff
Minister of Defence

12 September 2008

Release of the Coles Review of the safety and functionality of HMNZS Canterbury

In December last year, I ordered an independent expert review into the acquisition and introduction into service of the Navy’s multi-role vessel Canterbury.

In particular, I wanted to know whether there were safety concerns about the ship’s operation, design or performance. This followed the death at sea of Byron Solomon, the loss of one of the ship’s seaboats and speculation the ship was not safe.

I wanted to know whether the ship was capable of performing the tasks for which it was acquired.

I was aware of a number of performance issues which suggested that as delivered the ship fell short of what New Zealand had contracted for. I wanted confirmation that we were aware of all problems and that these were capable of remedy.

Finally, I suspected that management of the acquisition was not carried out as well as it might have been. I wanted to know what the shortcomings were and the lessons Defence needed to learn from this.

I wanted a reviewer with the expertise and independence which would give me and the public full confidence in its findings.

The setting up of the Review and the terms of reference were announced publicly and the full Review today is being released.

The professional experience and expertise of the Chief Reviewer John Coles ensures the report has credibility.

I welcome his key finding that the HMNZS Canterbury is an intrinsically safe vessel and that the ship will, with some short term remedial work, deliver the capability required by the Royal New Zealand Navy.

In his letter of referral, Mr Coles states: “I am confident in respect of HMNZS Canterbury that an appropriately governed and resourced get well programme will provide the NZDF with a cost effective versatile and valuable military capability throughout its service life.”

That confirms, independently, the advice I have received from the Chief of Navy, the Maritime Component Commander and the ship’s Captain about the ship’s capability.

I am also relieved to receive his confirmation that the ship’s design and performance were not responsible for the tragic death of Byron Solomon. I again however extend my sympathy to Byron’s family for their loss. There will of course be a Coroner’s Report which will report fully on cause of death.

John Coles’ view is that with remedial work at a relatively modest cost Canterbury will provide the capabilities we require.

The Canterbury was acquired predominantly for its sealift capability to transport troops and equipment to security and peacekeeping deployments, and support operations such as disaster relief in the Pacific.

Its further roles were additionally to act as a training ship and back up the other six ships in the Protector Fleet, and the two Frigates, in patrol and surveillance roles.

The Coles Review notes that in the latter role in sea states of level six (18 foot waves) it will need to be operated with prudent seamanship. In these conditions it is a safe ship but the crew may experience some discomfort.

I welcome the finding of the Review that Canterbury represents a value for money investment. John Coles confirms that the ship is significantly less expensive than similar modern warships on offer.

The review confirmed the problems already identified by Defence but did not identify any further problems. It notes a further, relatively small investment – around $20 million – will be needed to remedy problems.

Where these represent non-performance of contract, Defence will seek to have those costs met by the contractor under warranty. Defence is currently discussing these issues with BAE which has taken over from Tenix.

As these are commercially and legally sensitive issues, I do not wish to go into any detail. I would note the Reviewer’s belief that all these problems are capable of remedy within a short time frame.

Secondly, I acknowledge the findings of the review on the manner in which Defence governed and managed the acquisition process.

This left a lot to be desired. It was not adequate. Among other things Defence underestimated the complexity of the task, placed too much emphasis on the timeframe for delivering the project at the expense of resolving performance shortfalls and did not understand the constraints imposed by the ship’s design. The Project Team lacked the resources and range of skills needed. I would however acknowledge the dedication and energy of those involved in the project.

These are all lessons to be learned for the future. I welcome acceptance by Defence of its shortcomings and commitment to take on board the Reviewer’s recommendations.

Along with this report, I am releasing their advice on how they are implementing the Reviewer’s recommendations.

Finally, on the wider Protector Fleet issues.

The Inshore Patrol Vessels and Offshore Patrol Vessels have undertaken sea trials and performed extremely well.

The delay in delivery of these ships has primarily been due to a question of the ship’s seaboats and Lloyds Certification.

This issue is under negotiation with BAE. Once this issue is resolved, those ships, which have completed their sea trials, can be accepted.

Replacement seaboats for the Canterbury are on order and will be delivered in a matter of weeks.

To protect our contractual position and deliver the best outcome for the Navy and the taxpayer it is important that Defence accepts the other vessels only after the issues are resolved. The Government is looking to prompt action by BAE to meet its contractual obligations.

I would like to thank John Coles and his team for the thorough review they have delivered and invite him now to speak to his report.


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