Defence Air Warfare Destroyer project may need $1bn bailout
Posted: 17 Dec 2013 09:17
Defence project may need $1bn bailout
The nation’s largest defence project is facing a major budget blowout that could force a federal government bailout worth around $1 billion, according to The Australian.
The construction of three Air Warfare Destroyers for $8 billion is reportedly being hit by budget overruns of around $10 million a month, with an Australian National Audit Office report due out today to show the project was $106 million over its $618 million budget for 2012/13.
Emergency reserve funds are at risk of being tapped out, potentially leaving the government to fund a $1 billion rescue package to ensure all three warships get built, The Australian reported.
The report suggested the delivery date of the warships, which has previously been stretched by two years, will be pushed back again.
The news comes as the federal government prepares to hand down its Mid-Year Economic and Fiscal Outlook (MYEFO), which is expected to show a blowout in this year’s projected deficit to $50 billion. It also follows discussions of bailouts at Qantas Airways and Holden, with the budget position seen as part of the reason for the government deciding to keep a tight hold on the purse strings.
***
Should have done the same deal we did with the amphibs and that Navantia is proposing for the tanker replacement project, build in Spain and fit out here. Faster, cheaper and a better option than the current debacle.
It's getting to the point that Australia's major warship builders can't build on time and on budget to save their lives.
The nation’s largest defence project is facing a major budget blowout that could force a federal government bailout worth around $1 billion, according to The Australian.
The construction of three Air Warfare Destroyers for $8 billion is reportedly being hit by budget overruns of around $10 million a month, with an Australian National Audit Office report due out today to show the project was $106 million over its $618 million budget for 2012/13.
Emergency reserve funds are at risk of being tapped out, potentially leaving the government to fund a $1 billion rescue package to ensure all three warships get built, The Australian reported.
The report suggested the delivery date of the warships, which has previously been stretched by two years, will be pushed back again.
The news comes as the federal government prepares to hand down its Mid-Year Economic and Fiscal Outlook (MYEFO), which is expected to show a blowout in this year’s projected deficit to $50 billion. It also follows discussions of bailouts at Qantas Airways and Holden, with the budget position seen as part of the reason for the government deciding to keep a tight hold on the purse strings.
***
Should have done the same deal we did with the amphibs and that Navantia is proposing for the tanker replacement project, build in Spain and fit out here. Faster, cheaper and a better option than the current debacle.
It's getting to the point that Australia's major warship builders can't build on time and on budget to save their lives.