Annual Report 2004-05

Approved Major Capital Equipment Projects

Top 30 Projects by 2004-05 Expenditure

SEA 1390 Ph 2 FFG Upgrade Implementation

Prime contractor: ADI Limited

This project seeks to regain a comparative regional capability for Adelaide-class guided missile frigates (FFGs) and ensure that they remain effective and supportable to the end of their life. The upgrade will improve the anti-ship missile defence and air surveillance capabilities of the ships. Schedule delays continue to hamper the capability delivery for this project. Contractor delivery of the lead ship (HMAS Sydney) is now delayed until 2006. Commonwealth hand-over of the first follow-on guided missile frigate for upgrade remains linked to successful completion of contractor sea trials of HMAS Sydney. The commencement and completion dates of the remaining ships are subject to negotiation with the Navy and ADI, and take into account the Navy's operational requirements and ADI's capacity to meet project completion, with the delivery of the last upgraded ship by 2008.

As a result of the Defence Capability Plan decision to remove the two oldest guided missile frigates from service from 2006 when the last of the new Anzac-class frigates is delivered, these two ships are no longer being considered for upgrade under this project. Contract variations are under way.

The project did not achieve its 2004-05 revised estimated expenditure. Overall program schedule slippage has resulted in payment milestones not being achieved and earned value claims being less than estimated. In addition, expenditure for spares has been reprogrammed from 2003-04 to later years.

This project contributes to Navy capability.