Worst taxpayer-funded project debacle

Defence Minister David Johnston says Australia could offer military support to help the US in northern Iraq.

$500 million over budget ... The $8 billion Hobart-class Air Warfare Destroyers. Picture: News Corp Australia Source: Supplied

THE nation's most troubled defence project — the $8 billion Air Warfare Destroyer — is now running $500 million over budget and will be delivered at least two years late.

It is understood that the latest cost increase — estimated at $150 million — has only just been revealed by the alliance building the three warships — Adelaide-based government owned shipbuilder ASC, US giant Raytheon and Federal Government's Defence Materiel Organisation (DMO).

The incredibly complex build for the Hobart-class Air Warfare Destoryer has been dogged by delays caused by poor work standards, incorrect drawings and lack of coordination between the Spanish designed Navantia and the Air Warfare Destroyer Alliance.

Planning started in 2000 ... The Hobart-class Air Warship Destroyer being built at Port Adelaide. Picture: Supplied. Source: Supplied

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The government will soon announce a third attempt to fix it and that British based conglomerate BAE Systems will be brought in to oversee the taxpayer-funded repair job.

Speaking to News Corp Australia on board a RAAF KC-30A tanker plane high over the outback an angry Defence Minister David Johnston said the program was in "deep, deep trouble".

"That is a disgraceful mess of a program," Senator Johnston said.

"The AWD will be one or two years late if we are lucky and several hundred millions over budget."

He said he was still uncovering budgetary issues nine months after coming to office.

"People are not wanting to be frank about how bad this project is," Senator Johnston said.

"This is a bit of skunk."

Computer generated image ... The Hobart-class Air Warfare Destroyer (AWD) for the Royal Australian Navy ( RAN). Picture: Defence Department Source: Supplied

In better news for Adelaide and Australian industry the minister said the 2015 Defence White Paper would include plans to preserve shipbuilding.

He said ASC was doing a good job on submarine sustainment and that business would continue regardless of who built the navy's new submarines.

The government is closely studying Japanese and German designs as it seeks to avoid extending the life of the Collins Class fleet.

"Were we able to seamlessly trade out of Collins there would be a considerable saving.

"We haven't built a submarine for 20 years and all those skills have evaporated," Senator Johnston said.

"In terms of sustainment we are back in business."

He said the White Paper may not include exact costings for the new boats and it would definitely not give a final number.

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