Patrick Durrant | Sydney
Project Air 5431 Phase 1 Deployable Defence Air Traffic Management and Control System and Project Air 5431 Phase 3 Civil Military Air Traffic Management System (OneSKY) have been added to the Projects of Concern list.
A statement released by the office of Minister for Defence Industry Christopher Pyne emphasised “there is no dependency between the two and their inclusion on the Projects of Concern list is unrelated”.
The $50 million Air 5431 Phase 1 contract was awarded to Indra Australia in 2014 to deliver a mix of mobile and transportable air traffic control radars and supporting equipment to allow Defence to control and monitor air traffic while deployed on operations.
The project has experienced schedule delays since approval, and initial delivery is expected almost two years later than originally planned.
The Air 5431 Phase 3 contract, valued at $906 million when approved in 2014, aims to deliver the Defence aspects of a harmonised civil/military air traffic management system under the OneSKY banner—collectively being led and managed by Airservices Australia.
“This is a highly complex, inter-departmental project of national significance that has experienced some substantial challenges getting into contract,” the statement read. “The challenges revolve around issues with ensuring value for money for the taxpayer.”
Negotiations on the multiple complex layers of the project are continuing with doubts there will be a contract signature with preferred tenderer Thales Australia by the end of the year. In fact in its April report the ANAO said contracts are unlikely to be signed prior to mid-2017, at least 40 months after tender evaluation commenced. The cost for the project now seems likely to blow out well above the $1 billion mark.
Airservices Australia was criticised by the ANAO for a lack of competitive tendering and for not securing value for money in its contract for consultancy services from the International Centre for Complex Project Management (ICCPM).
Minister Pyne said the Projects of Concern process has delivered proven results through the remediation of 17 troubled projects with a combined value of around $17 billion.