Peter La Franchi/CANBERRA
Final acquisition decisions on the Royal Australian Air Force's A$3.4 billion ($2 billion) Project Wedgetail airborne early warning and control requirement are to be delayed until at least the end of the year, pending a review as part of Australia's new defence white paper.
The delay, coming just days before a widely anticipated contract finalisation with Boeing, has shocked the Australian and US aerospace industries.
Australian Defence Minister John Moore says the deferral is to allow decisions on whether the project fits into the balance of the Australian Defence Force's (ADF)required capabilities in the context of the white paper.
"This will allow a decision to be taken in the light of Australia's overall strategic objectives, capability priorities and defence funding."
The deferral saw the Australian Department of Defence dispatch its senior acquisition official, undersecretary Michael Roche, to the USA for urgent talks with the US Department of Defence to explain the decision.
Boeing was named preferred supplier in July last year with a bid valued at around A$2 billion. The spiralling cost increases of the Boeing package follows a wave of acquisition cost over-runs in the last four years. Boeing's Wedgetail is based on a 737 platform with a Northrop Grumman Multirole Electronically Scanned Array (MESA) radar.
Analysts suggest that the move could impact the Turkish air force AEW&C programme which is being competed for by Boeing and Raytheon.
The deferral has caused concern among Boeing's Australian team partners. The head of BAE Systems Australia, Peter Anstiss, advised all employees in an e-mail sent on 24 August, that the "direct impact of this decision on our business as a whole must now be inserted into the overall business review over the next two to three weeks".
BAE Australia is to provide hardware and software support for the MESA radar and manufacture radar and identification-friend-or-foe electronics and cabinets.
Project Wedgetail's future has grown increasingly uncertain over the past six months. In April, RAAF chief Air Marshal Errol McCormack publicly admitted that the number of aircraft to be acquired was no longer predicated on seven platforms.
In May, the former vice chief of the ADF, Air Marshal Doug Riding, was privately conceding to Australian media that the project faced major political hurdles if it was to survive in a restrictive budget environment. However, Riding also stressed that the project remained an essential element of national strategic planning. Riding is now a director of BAE Australia.
Wedgetail had been expected to secure Australian Government funding as part of this year's May defence budget but this was deferred until the Cabinet decision last week. The move to delay a final decision until the release of the white paper, set for November, effectively means the contract is unlikely to be finalised before year end.
Source: Flight International
