Smith Raises Doubt Over Strike Fighter Project
(Source: Australian Strategic Policy Institute; issued July 26, 2011)
Because of major delays and a doubling of costs, Australia will not commit to buying the F-35 until the Pentagon completes an exhaustive risk assessment of the program. (USAF photo)
Defence Minister Stephen Smith has refused to guarantee Australia will buy 100 US-built F-35 Joint Strike Fighters, saying the project is getting close to the cost and delay overruns Defence built into the order.

The Government has placed a tentative order for 100 of the stealth aircraft to replace its ageing fleet of less-capable F/A-18 Hornets and the now-retired F-111 fighter-bomber.

Speaking in the United States before a meeting with defence secretary Leon Panetta, Mr Smith says Australia has made it clear the order, at present, is for only 14.

"We are also in the market for Joint Strike Fighters beyond 14, but we haven't placed a firm order or commitment for any more than 14," Mr Smith told ABC News Breakfast.

He said Australia built into the project "capacity for slippage" in terms of cost and delay but "we are starting to rub up against that".

"We are very conscious there have been both cost and schedule delays, and that will form a part of my conversations with not just secretary of defence [Leon] Panetta but also with other officials."

Last month, a US Senate committee heard the latest cost estimate - which has nearly doubled from initial targets - would make the fleet of war planes unaffordable.

The Pentagon's top weapons buyer, acquisition chief Ashton Carter, said the program currently had "an unacceptably high acquisition bill".

The cost of each aircraft in the US has ballooned from $US69 million each to $US103 million and the project has been dogged by ongoing design and development flaws.

Australia is paying $3.2 billion for the first 14 at $228 million per aircraft - an initial cost to buy early-build units so pilots can be trained on the advanced fighter-bomber.

The balance of the $16 billion order will be from aircraft made later in the production cycle when prices are expected to be lower.

However a report from the Australian Strategic Policy Institute says delays in the F-35 are a bigger concern than the cost.

The defence and security think-tank says the RAAF may have to wait a further seven years before the joint strike fighter enters service - six years after delivery was originally scheduled.

Mr Smith says he will also discuss plans for Australia's proposed 12 submarine fleet to replace the unreliable Collins class vessels.

He said the US could help with propulsion, weapons and communications systems but ruled out buying nuclear-powered submarines.

"Australia's conventional submarine fleet will compliment America's nuclear submarine fleet, and one thing I have ruled out, we are not contemplating nuclear-powered submarines," he said.

"There is a range of government and industry expertise that we think can be of assistance."

He said the Government is committed to assembling 12 submarines in South Australia - the largest defence project ever in Australia. (ends)

Minister for Defence – Interview with Craig McMurtrie, ABC AM, 27 July 2011
(Source: Australian Department of Defence; issued July 27, 2011)
TONY EASTLEY: Australia’s Defence Minister Stephen Smith is in Washington and he is worried about money, but it’s not the huge debt debate that is crippling US politics that concerns him. Rather, Mr Smith is worried at the huge cost overruns that are plaguing some of Australia’s big ticket defence purchases like the Joint Strike Fighter program.

Stephen Smith has told AM that he’s warned Pentagon officials time is running out for the program to get back on schedule and he says there’s a danger that deep cuts in US defence spending could ultimately affect Australia’s defence plans.

He’s speaking here to our correspondent Craig McMurtrie.

STEPHEN SMITH: It’s a matter for the American system to resolve these debt issues but one thing which is clear is that there is a very live prospect that there will be further budget cuts so far as defence is concerned, so obviously we’re following that very carefully – and also following that with an eye to whatever implications that might have for capability, for acquisition, but also for operation.
So obviously we have an interest in seeing that resolved one way or the other because it may well have some implications.

CRAIG MCMURTRIE: In these cost-cutting times here in DC more US politicians are criticising cost blowouts in the Joint Strike Fighter project. Senator McCain has called it an “incredibly troubled program” and a “train wreck”. Do you agree with his assessment?

STEPHEN SMITH: Well, I’ll leave it to others to give their own characterisation. I’ve met today with Admiral Venlet, who is the CEO of the Joint Strike Fighter program office.

I’ve already expressed my concerns publicly and privately that whilst in our own planning we made a number of sensible decisions, we chose the conventional variant. We’ve also made sure that in our own schedule for time, for delivery and for cost that there was plenty of padding for what you always have to expect in a high technology, complicated new development, which is slippage. But we’re now running close up to those schedules, particularly on delivery.

So I’ve made the point very clear that we’re now monitoring very closely the delivery timetable. We’re also monitoring very closely the cost.

CRAIG MCMURTRIE: What are your options, though, if these blowouts, these delays continue?

STEPHEN SMITH: It’s quite clear that there will be an exhaustive risk assessment done of the current schedule and that’ll be available to the US administration and to partners like Australia I expect by the end of the year or early next year.

That will then enable us to start making some judgements about whether we need to make any other plans or take any other action so far as a potential gap in capability is concerned.

CRAIG MCMURTRIE: Does that mean possibly more Super Hornets?

STEPHEN SMITH: Well, that’s an obvious option, but we need to take this step by step. It’s early days; I don’t want people to run or leap to a conclusion that that is the path we’ll go down. There is some more time. We need to continue to monitor the situation very carefully and closely.

CRAIG MCMURTRIE: I’m curious. How would you describe the political atmosphere in this town right now?

STEPHEN SMITH: It’s a very interesting time and there’s a lot of frenetic activity. In the end, my own judgement after years of watching our own system and the American system is that these things will be resolved but generally resolved at the death knock.


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