Yes, it cost 9 billions for 3 Air Warfare Destroyers and no, it does not come with an Aircraft Carrier
http://www.abc.net.au/news/2015-05-22/air-warfare-destroyer-hobart-launch-techport-adelaide/6487870
Air Warfare Destroyer: Government to put control of troubled warship program out to tender as cost hits $9 billion
The Federal Government will put control of the troubled Air Warfare Destroyer (AWD) project out to tender, following a new report revealing the total cost for the three new ships has now blown out to around $9 billion.
The audit into the status of the project has revealed at least an additional $1.2 billion will be required to complete it.
The first of the three ships, HMAS Hobart, was originally due to be delivered last year.
The ship will be floated in Adelaide tomorrow, but extensive fit-out work means it will still be more than a year before it is ready to be deployed.
The report reveals each of the ships are now expected to be completed more than two-and-a-half years behind schedule, but the Government will not release the document for reasons of commercial confidence.
AWD schedule delays
Original delivery Revised estimate
Ship 1 December 2014 June 2017
Ship 2 March 2016 September 2018
Ship 3 June 2017 March 2020
Finance Minister Mathias Cormann described the extent of the cost and schedule overruns as "very disappointing", and said the Government would now release a fresh tender for oversight of the project.
"The Government will begin a limited tender, to either insert a managing contractor into ASC [Australian Submarine Corporation] for the remainder of the build, or further enhance ASC capability through a partnering arrangement," he said.
"What we're trying to do is get the project completed at the lowest possible cost and in the fastest possible time in light of the significant cost and schedule overruns that we inherited.
"That will be done through ASC, but it'll be done through an enhanced partnership or it'll be done by inserting a managing contractor."
The ABC understands the two companies likely to bid for the task of overseeing completion are BAE Systems and Spanish shipbuilder Navantia.
The project is currently being run by the AWD Alliance, a consortium made up of the Defence Materiel Organisation, the Government-owned shipbuilder ASC, and defence contractor Raytheon Australia.
Documents leaked recently to the ABC indicated the alliance was concerned its shipbuilding reputation was being harmed by cost blowouts and project delays.
Last December, the Government announced it was bringing in a team of shipbuilding experts from Navantia and BAE to provide "mentorship and advice" to the ASC management team.
The day after we see more jobs lost at Holden and the day before we are meant to be celebrating the success of an industry, we get this kick in the guts from the Federal Government.
SA Premier Jay Weatherill
Former defence minister David Johnston lost the portfolio in a ministerial reshuffle last year, after he told the Senate that he would not trust ASC "to build a canoe".
A
senior analyst with the Australian Strategic Policy Institute, Mark Thomson, said the alliance's structure seemed to be one of the problems.
"With an alliance contract where you don't have somebody clearly in charge you can rapidly find yourself in a situation where things go wrong and people are looking at one another, passing blame, not taking responsibility and decisions aren't made," he told the ABC recently.
Mr Thomson on Friday added the blowout put further doubt on ASC's ability to build the next generation of submarines in Adelaide.
"It's going to be very hard in Cabinet to muster support on doubling down on Australian industry to build the next generation of submarines or warships," he said.
An internal defence update obtained by the ABC said the second of three AWDs had been plagued by defects.
The first warship was meant to be ready in 2014 but its cable and combat systems faced "numerous defects".
Thousands of spectators are expected to be present when HMAS Hobart is floated for the first time at the Osborne shipyard on Saturday.
Cormann's comments a 'kick in the guts' for SA
SA Premier Jay Weatherill has criticised Senator Cormann, saying he had "exaggerated figures and deliberately used large numbers to undermine confidence" in the sector.
He said using the example of the first ship, with related start-up costs, ignored efficiencies gained through the rest of the build program.
"This report has lumped all the start-up costs inclusive of separate facility costs to somehow come up with a large figure multiplied [for] the entire project," Mr Weatherill said.
Mr Weatherill said Senator Cormann "deliberately sabotaged the celebration of the launch".
"The day after we see more jobs lost at Holden and the day before we are meant to be celebrating the success of an industry, we get this kick in the guts from the Federal Government," he said.
Mr Weatherill said it also flew in the face of a COAG agreement to recognise the importance of a continuous naval build strategy.
"Just a few weeks after reaching agreement at COAG we have federal ministers
continuing the assault started by David Johnston, selectively using figures to deride the accomplishments of the nation's shipbuilding industry."
South Australia's defence industry association, the Defence Teaming Centre, has called on the Government to make the audit public.
"If you want to be taken seriously when you release reports like that you have to provide the detail so that independent analysis can be conducted," chief executive Chris Burns said.
"We don't even know who did this audit, how it was conducted, what was the methodology and who was involved."
Production efficiencies 'on the rise'
AWD Alliance chief executive officer Rod Equid told 891 ABC Adelaide that there was "no question" there had been problems with the first ship but people had to consider the technical aspects of a start-up operation that would improve with each ship.
"We've doing things for the first time and we learn things how we go along," he said.
"The important thing is how we learn from that and take those lessons to the next ship."
By the time we get to the third ship, the labour costs will be half what they were on the first.
AWD Alliance chief executive Rod Equid
He further quashed reports that each ship was costing taxpayers $3 billion.
"This is principally because of the other costs included in the $9 billion are facilities, other defence costs, purchase of missiles, the training systems, the technical publications, etc," Mr Equid said.
"The unit price of ships is not nine divided by three."
Mr Equid said production labour had been a large expense in the first ship, "but we're seeing improvements to the second ship of more than 30 per cent, many areas of 20 per cent to the third ship".
"By the time we get to the third ship, the labour costs will be half what they were on the first," he said.
He said that while there had been a "conversation about the costs", there had been no compromise on the capability and quality of the "exceptional ship", and the safety in performing the work.
Mr Equid added that while there could have been an order placed to build the ships in Spain, there would still have been extra costs involved to adapt and convert the ships' systems to Australian Defence Force requirements.
Gallery: The first Air Warfare Destroyer of three
HMAS Hobart is 146.7-metres in length, capable of a top speed of more than 28 knots (52kph) and has a range of 5,000 nautical miles at 18 or more knots.
It has two diesel and two gas turbine engines, which can produce 36 megawatts of power, the equivalent of the power of 200 family sedans.
The destroyer can carry a crew of about 180 and accommodate up to 236 people in all.
The flight deck and helicopter hangar can accommodate a Seahawk helicopter and the destroyer has two inflatable boats, which can be deployed for tasks including transport, boardings of other vessels or for rescues.
Once the ship is floated on the weekend and named in a traditional ceremony with the smashing of a champagne bottle, it will spend a further 12 months in port while combat systems equipment are loaded and fitted onto the ship ahead of sea trials.
