Defence at fault for frigate cost blowout

The Ministry of Defence got the cost estimates wrong in the early stages of the process. Secretary of defence Helene Quilter

The Ministry of Defence has taken full responsibility for a $148 million budget blowout for an upgrade of the Anzac frigates.

Defence Minister Ron Mark revealed the major defence project had overrun costs by 30 per cent in Question Time in Parliament on Wednesday, which had led to the Cabinet having to agree to a revised contract with Lockheed Martin Canada – the supplier of the upgrade.

Mark told Parliament the project had blown out to $639m after being budgeted at $491m in 2014 under the former government and then-minister Gerry Brownlee.

But at a foreign affairs select committee yesterday, the secretary of defence Helene Quilter said the ministry ‘‘did not meet the standard’’ and had failed in its responsibilities to cost the project appropriately.

She accepted the ministry had got the cost estimates wrong in the early stages of the process.

On Wednesday Mark blamed the blowout on a ‘‘series of inaccurate estimates and project management errors’’ by the ministry and a failure by previous ministers to act.

He also said the lives of men and women had been ‘‘compromised’’ due to the slow pace in which the project had been dealt with by the former government.

Yesterday, foreign affairs select committee member and minister Willie Jackson asked Quilter to confirm if ‘‘lives had been compromised’’.

She said the 18-month delay had been ‘‘unacceptable’’ but the frigates were still functioning.

The Cabinet sign-off for the extra money also meant the upgrade was now under way.

Chief’s briefing

Defence Force chief Lieutenant General Tim Keating was also at the select committee where he briefed members about the extent of work being carried out both internationally and domestically by defence personnel.

One area where he said improvements could be made was in some of the infrastructure used by the Defence Force, in particular some barracks built during the war period.

He said there was an opportunity to team up with other social agencies, and groups like police, to use taxpayers’ money for infrastructure that could be accessed and used by multiple organisations.

Keating also briefed MPS on a potential partnership with the Singaporean Defence Force, which is looking for airspace to do an increased amount of training as it looks to expand.

A social, economic and environmental impact report is being conducted on what that partnership might look like but Keating stressed that Singapore was a ‘‘close trusted friend’’ and the deal could have huge opportunities for New Zealand.