Patrick Walters, National security editor | March 13, 2007
THE future war-fighting capacity of Australia's next generation destroyers will be a critical selection issue Australia's Navy chief Vice Admiral, Russ Shalders said yesterday.In an important pointer to navy's thinking on the $7 billion contract, Admiral Shalders said the ability to upgrade the destroyers would be crucial.
Admiral Shalders was speaking on the foredeck of the Spanish destroyer Alvaro de Bazan which arrived in Sydney yesterday.
The Spanish F100 class vessel is competing with a joint US-Australian designed ship for the air warfare destroyer contract.
Questioned about the capability of the Alvaro de Bazan the navy chief said the F100 class was "a very capable ship in 2006".
"From my perspective and my perspective is different, I am after capability, capability and capability.
"Schedule and cost are obviously in the mix but I am after capability."
Admiral Shalders told The Australian that the evolved design presented by US firm Gibbs & Cox was the more capable vessel.
"There is a certain growth margin in this ship, (the F100 class) there is a larger growth margin in the evolved design," he said.
Admiral Shalders stressed that the long term capability issue was the key question the Government would need to confront in the next few months.
But in the end the Government would have to make decisions about value for money.
Defence Minister Brendan Nelson acknowledged that the notional $6 billion AWD could rise with industry estimates already putting the cost of three ships at between $7-8 billion.
"If the advice to me is that we do have a best value bid, notwithstanding the costs involved, I am very confident we will have a decision on this," Dr Nelson said.
Yesterday the Alvaro de Bazan was put through its paces in a naval exercise off Sydney involving both F/A18 Hornet aircraft and the RAN frigate, HMAS Ballarat.
The Spanish ships Aegis combat system was seen successfully tracking and targeting the Hornets from the time they left their base at Williamtown near Newcastle.
Dr Nelson also insisted that the $6 billion warships would not see the lengthy and expensive blowouts that had plagued earlier projects.
The Defence Material Organisation, which overseas more than 210 defence projects, had overhauled its processes after criticism from the auditor-general and internal reviews.
It has reduced its slippage time from 20 per cent to 14 per cent and was aiming for a figure under 10 per cent which it believes is close to private sector best practice.
"At the moment around 75 per cent of our projects are on schedule," he told reporters.
"Over the last three years we've had 10 projects that have been late and above cost, but we've had 53 that have come in early and below budget.