Heavy weather for new destroyers
By Brian Robins and Gerard Ryle
May 1, 2004 SMH
In only two years, its cost has risen by a third to $6 billion and its delivery date has slipped by two years to 2015. If this was any other part of the Government or the private sector a $1.5 billion cost blow-out would bring intense scrutiny. Yet, so far the cost increase of three new air warfare destroyers has drawn no public comment.
The three new destroyers, at $2 billion each, are the most expensive pieces of equipment to be bought by Defence over the next decade.
To put the cost escalation into perspective, it could fund the $1 billion needed to finish the dual carriageway of the Hume Highway between Sydney and the Victorian border, or it would make a handy downpayment on the $4.5 billion needed to finish upgrading the Pacific Highway between Sydney and the Gold Coast, improvements which would make a significant dent in the annual road toll.
One reason for the increased cost is that the ships will include a sophisticated Aegis air defence weapons system and possibly extra land attack capability as well as ballistic missile capability.
Three ship engineering firms have been requested to put forward designs for the new destroyers, although in defence circles the US designer Gibbs & Cox is widely seen as the front-runner. It designed the popular Arleigh Burke class of destroyers used by the US Navy.
The initial estimate of $4.5 billion for the three destroyers was based on an off-the-shelf design. The huge cost increase indicates the destroyers are being designed especially for Australian requirements.
The latest estimate of up to $2 billion for each vessel is significantly higher than the $US1 billion cost of the most recent of the Arleigh Burke class of warships.
Defence analysts warn that as soon as Defence moves away from an off-the-shelf design, a new round of problems begins, pointing to the problems it had with Collins-class submarines. "Why do we need something designed specifically?" asks Aldo Borgu, of the Australian Security Policy Institute. "I hope the Government is asking the right questions."
The preferred design is due for selection by mid-2005, putting the project on a very tight schedule.