Australian Government Sends In Rescue Squad For Troubled $8.5 Billion Air Warfare Destroyer Project

The Australia Navy’s new ships are behind schedule. Photo: Getty Images.

The Abbott government is hoping private contractors can bring the $8.5 billion Air Warfare Destroyer shipbuilding project by the Adelaide-based Australian Submarine Corporation back on track, announcing the intervention at a media conference today.

Defence minister David Johnston has previously claimed the project could be up to $600 million over budget. The first two ships are 30 months behind schedule, the third, three years late. Finance minister Mathias Cormann declined to put a figure on the budget over-run at the announcement.

Private contractors BAE Systems, Raytheon Australia and Navantia SA will make “immediate improvements” to bring the $8.5 billion project back on track, the ministers said. The contractors will be employed for an “interim period” between now and the end of July 2015.

Johnston, who blasted the Australian Submarine Corporation (ASC) late last month when he said he wouldn’t trust them “to build a canoe”, revealed Australia would establish a “sovereign submarine industry”.

The defence minister did not provide further details and would not say whether building and maintenance contracts would remain in Australia.

“In the near future there will be further announcements as to exactly the nuts and bolts and mechanics of precisely what we intend for that,” he said.

Australia is looking at spending around $20 billion to replace the Collins class submarine fleet, with Japan rumoured to a front-runner for the contract.

The minister has already announced that two new Australian Navy ships will be built abroad.

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