Australia — Changes to Air Warfare Destroyer Construction Program

The Min­is­ter for Defence Stephen Smith and the Min­is­ter for Defence Materiel Jason Clare today announced the real­lo­ca­tion of con­struc­tion work for the $8 bil­lion Air War­fare Destroy­er (AWD) Project.
Aus­tralia is con­struct­ing three AWDs based on a proven design from the Span­ish Navy. The ships are due to be deliv­ered from Decem­ber 2014. When com­plete, the AWD will be one of the more capa­ble types of war­ship of its size in the world.

The AWD Project is an impor­tant ele­ment of Force 2030. The Gov­ern­ment and Defence have been active­ly work­ing with Defence Indus­try and the AWD Alliance, which is man­ag­ing the AWD project, to deliv­er the project. The AWD Alliance con­sists of ASC, the Defence Materiel Organ­i­sa­tion (DMO) and Raytheon. 

Con­struc­tion of the AWDs involves 90 sep­a­rate steel blocks being built at three ship­yards in Ade­laide (ASC), Mel­bourne (BAE Sys­tems) and New­cas­tle (For­gacs). Three addi­tion­al sonar block assem­blies are being built in Spain and the Unit­ed Kingdom. 

The Mel­bourne BAE Sys­tems ship­yard is also build­ing 14 steel blocks for the super­struc­ture of two new 27,500 tonne Land­ing Heli­copter Dock ships (LHDs) due for deliv­ery in 2014 and 2015. 

Last year the project encoun­tered dif­fi­cul­ties in rela­tion to engi­neer­ing and con­struc­tion of some of the first AWD hull blocks. To assist the AWD project sched­ule, ear­li­er this year the AWD Alliance real­lo­cat­ed con­struc­tion of nine steel blocks from BAE Sys­tems in Mel­bourne to the For­gacs ship­yard in Newcastle. 

The Mel­bourne BAE Sys­tems ship­yard remains stretched, work­ing on two major projects at the same time – steel blocks for the Air War­fare Destroy­ers and the super­struc­ture and inte­gra­tion of the Land­ing Heli­copter Dock Ships.

The Gov­ern­ment, the AWD Alliance and BAE Sys­tems take the sched­ule for both these impor­tant projects extreme­ly seriously. 

In Feb­ru­ary 2011, BAE Sys­tems advised the AWD Alliance of poten­tial sched­ule delays. 

Over the last few months, the AWD Alliance and BAE Sys­tems have been work­ing close­ly to devel­op options to improve the pro­duc­tion program. 

In March, the Min­is­ter for Defence met with Guy Grif­fiths, the Group Man­ag­ing Direc­tor — Inter­na­tion­al of BAE Sys­tems UK, in Lon­don to dis­cuss this project. 

The Min­is­ter for Defence Materiel has also met with the CEO of BAE Aus­tralia, Jim McDow­ell, on a num­ber of occa­sions about this project. 

Ear­li­er this month BAE Sys­tems pre­sent­ed the AWD Alliance with a plan to adjust its work­load on the AWD Project. 

The advice of the AWD Alliance is that if no action is tak­en to relieve the pres­sure on the Mel­bourne BAE Sys­tems ship­yard the first ship would be two years late, approx­i­mate­ly 25 per cent over schedule. 

The AWD Alliance (with the sup­port of BAE Sys­tems) there­fore pro­pos­es to take the fol­low­ing action:
— Up to 13 steel blocks will be real­lo­cat­ed among the three Aus­tralian ship­yards in Ade­laide, Mel­bourne and New­cas­tle – sev­en for advanced fit out and six for con­struc­tion; and
— Up to five steel blocks will be real­lo­cat­ed to Navan­tia in Fer­rol, Spain. 

These changes involve the real­lo­ca­tion of blocks for the first two ships only and are sub­ject in the usu­al way to sat­is­fac­to­ry com­mer­cial arrange­ments with the shipyards. 

BAE will com­plete the struc­tur­al steel and ini­tial out­fit­ting work on the sev­en steel blocks it is cur­rent­ly work­ing on, as well as all its work on the 14 blocks for the super­struc­ture of the Land­ing Heli­copter Dock Ships and the inte­gra­tion work. 

A deci­sion on the real­lo­ca­tion of blocks, if any, on the third AWD will be made lat­er in the project. 

This action will reduce the sched­ule risk to both this project and to the LHD ships project. 

The AWD Alliance has advised that this action will reduce the delay of the com­ple­tion of Ship 1 by up to 12 months, and of all three AWDs by up to 12 months. 

It will also reduce the pres­sure on BAE Sys­tems to com­plete the con­struc­tion of the super­struc­ture and the inte­gra­tion of Australia’s two new LHD ships. 

Defence will plan its com­pre­hen­sive options to man­age the tran­si­tion from the cur­rent Ade­laide Class frigates to the AWDs tak­ing into account the agreed real­lo­ca­tion of blocks. 

Mr Smith’s Office: Andrew Porter 0419 474 392
Mr Clare’s Office: Kore­na Flana­gan 0418 251 316
Depart­ment of Defence: (02) 6127 1999 

Press release
Min­is­te­r­i­al Sup­port and Pub­lic Affairs,
Depart­ment of Defence,
Can­ber­ra, Australia 

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