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Govt to put warship program to tender

The Government will put the Air Warfare Destroyer (AWD)
project to a new limited tender, following a cost blowout.

The ABC reports that a forensic audit into the project found
that it will now cost more than $9 billion, or an extra $2billion, to complete.
In addition, it is running two and a half years behind schedule.

Explaining that the Government was very disappointed with
the result of the audit, Finance Minister Mathias Cormann said there will now
be a limited tender to establish new oversight of the troubled project.

He said this will mean there will either be a new managing
contractor inserted in to the operation or there will be a partnership arrangement
between ASC and another organisation.

“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,” Cormann said .

“That will be done through ASC, but it’ll be done
through an enhanced partnership or it’ll be done by inserting a managing

As the Australian reports, the total cost of building the
three warships will be about three times as much as it would cost to purchase
them from Spanish company Navantia.

Navantia, along with Britain’s BAE Systems, is expected to
bid for the task of overseeing the project.

Currently the project is being overseen by the AWD
Alliance, which includes ASC, mission systems firm Raytheon Australia and the
Federal Government’s Defence Materiel Organisation.

AWD Alliance chief executive officer Rod Equid told ABC
Radio that the project’s efficiency is improving and will get better as it
continues and the second and third ships are built.

The first of the AWDs, New Ship Hobart, will be floated off
tomorrow. It was scheduled to be delivered in December but will probably not be
delivered until at least June 2017.

Image: The Australian

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