Defence Update

The Explanatory Notes to the Department of Defence’s Estimates of Expenditure 1984-85 (Appropriation Bill No. 3) issued in April show a revised estimate of 1984-85 Outlays of $6035 million compared with the original Budget estimate of $5820m. The notes show that price increases to December 1984 account for $78m while currency exchange fluctuations to March 6 added $152m. Other variations required an extra $29m, while there were reductions in the unappropriated provision for prospective wage and salary increases of $45 million.

The Notes also show that the cost in the Additional Estimates of new capital Defence equipment and stores in 1984-85 has risen by $203m to $1537m. The original Appropriation was $1333. 698m. Of this, there is an increase of $146m for aircraft and associated initial equipment and stores, $34m for “other equipment and stores” and $23m for naval construction. The exchange variations in this sub-division account for between the time of printing Appropriation Bill No. 1 (when the Australian dollar equalled 82 US cents) and preparation to the Additional Estimates Bill (to March 6, 1985) when one Australian dollar equalled 68 American cents (a reduction of 17%).

In the case of the F/A-18 fighter project payments, while the current bill of $3. 4 billion (December 1982 prices adjusted for the 10% currency devaluation in March, 1983) obviously would have risen significantly if it had to be paid now. The actual money to be paid in 1984-85 is estimated to have fallen by $21m to $737m this is due to the fact that some payments expected to fall due in the US in the financial year have not been presented thus more than offsetting a rise of about $103m for the fighters due to the fall in the Australian dollar. This current saving however will have to be paid for eventually.

Wamira Project Flies Into Turbulence:

The Defence Minister, Mr Kim Beazley and his senior military and departmental advisers face a difficult problem in sorting out whether it is an economically prudent cost-effective proposition to allow the further development and production phases for 69 Australian-designed basic trainers for the RAAF to proceed. The Wamira A10 was planned as an Air Force-Australian Industry project in 1981 to replace the current 33 CT4 basic trainers by the late 1980s.

The Australian Aircraft Consortium Pty Ltd was formed by Hawker De Havilland, Commonwealth Aircraft Corporation and the Government Aircraft Factory for the express purpose of designing and developing a low-wing monoplane specifically designed for military pilot training. This included aerobatics, cross-country navigation exercises and of being capable of Introductory weapons training. It was required that the design be to full military specifications. It was hoped the A10 would attract overseas interest.

RAAF structural design requirements also included a minimum service life of 20 years and 8000 flying hours. The airframe was to be designed to incorporate a Pratt & Whitney Canada PT6A-25C turboprop engine which would provide a cruising speed of 200 knots at sea level.

Within the past year it has become apparent that the project has suffered considerable delays and that its estimated cost of $155 million in 1981 had escalated alarmingly. Recent figures given by the Commonwealth Auditor-General suggested the cost had risen to more than $280m. The design and development contract awarded to AAC in June, 1982 was for $36 million.

Last year the Government set up an Inter-Departmental Committee (IDC) to review the project and its future. Mr Beazley has been examining its recently received report along with reports by the Defence Department and the RAAF, and submissions by the AAC and the defence aircraft industry trade unions.

It has become apparent that the RAAF is concerned that the project, in a tight budgetary situation, could consume valuable funds in the coming years which it now would prefer to put towards more urgent priorities such as AEW (Airborne Early Warning aircraft and systems) and the conversion of the four Boeing 707 RAAF transports to be capable of in-flight refuelling at least for the new F/A-18 fighters, and possibly the F-111 strike jets.

The earlier priority for a new basic trainer has eased because stringent fatigue testing has shown that the CT4 trainers at Point Cook can carry on for much longer than was earlier believed. On top of that there is now seen to be a viable and cheaper alternative in choosing an overseas designed and developed basic trainer which would be built under licence in Australian factories.

The current situation is that Short Brothers (Australia) Pty Ltd, a subsidiary of Shorts (Aircraft & Missiles), Belfast, UK, has come up with a major industry proposal for an attractive collaborative arrangement to build the Brazilian Embraer Tucano. It was recently selected by the Royal Air Force to replace the RAF jet Provosts as the basic trainer. The Brazilians beat the Swiss Pilatius PC-9, the British Firecracker, and the Australian A20 (the tandem seat version of the side-by-side seat A10) for the RAF order of 145 aircraft.

Shorts understands that their bid should make it clear there would be no reduction in the workload for Australian industry compared with the A10. It is likely there would be some interchange of component manufacturing if the Shorts proposal was accepted. At the time of writing it was not clear if Pilatus also will be making an unsolicited bid, possibly with a straight licence to build a proposal.

AAC is understood to be preparing a proposal that could include a revised design, and possibly reduction of the requirement from military to civil certification. This latter factor could reduce the cost of testing the development aircraft. However, the time it might take for AAC to come up with a revised development cost is uncertain. That might depend on the Government wishes. But it is likely to take some months. A revised production cost could take until next year.

In the meantime, there has been reactivated speculation that Hawker de Havilland might be prepared to take over the project, possibly in an amalgamation with CAC. But given that Mr Beazley currently is examining a task force report on rationalising and making more efficient the Government Aircraft Factories (GAF) it hardly seems likely that the government-owned factories would be left out of any changed procedure.

An added attraction to the Shorts proposal is that the company is offering the Sherpautility transport as a follow-up for the ageing Caribou transports in RAAF service. Shorts sold the Sherpa in considerable quantities to the US military not so long ago. In spite of RAAF concerns about delays and swiftly rising costs, and the Auditor-General’s adverse report, AAC, according to General Manager, Mr Peter Debnam, contends there are no real problems with the A10 Wamira development program. He claimed overseas competitors are not comparable, partly because they have intermediate-capacity engines. Mr Debnam said a lot of red herrings were being cast around about the capabilities and costs of overseas-designed trainers. He said when all factors were compared there was little difference in costs between the A10 in performance and costs when the present development phase was completed and the production phase was agreed.

He pointed out that any overseas-designed aircraft had to be modified to meet RAAF requirements and to fit specifically required equipment. The A10 also was specially designed for low in-service costs.

The original roll-out of the A10 prototype was scheduled for December last year and the first flight by early March this year. This was not achieved. The roll-out now is set for September, with the first flight due – if the program proceeds by the end of February next year. Mr Debnam says the only major problem facing the Wamira project is lack of Department of Defence funding. Questioned in April by the Senate Estimates Committee E, Air Vice Marshal Alan Heggen, Chief of Air Force Materiel, said that when the A10 project began the Defence Department believed there were adequate (monitoring) control measures at the time. but they proved inadequate. Among the reasons were that the contractor was not able to provide data in the detail that the costs and schedule control system required. Another was that the very nature of a design and development project meant that there was no finite and recognisable end to the design and development task and it was difficult to measure the total extent of the task. While it was possible to determine how much work had to be done and what stage was reached, it was not possible to measure precisely what remained to be done. . . because. . . new work and new tasks emerged from time to time.

AVM Heggen said because of the concern regarding the management of the project and the implications of the ultimate cost, the Government commissioned an IDC report. In April Heggen estimated that funds spent on the design and development phase of the A10 were about $34m. In terms of the contracted date, the project was running some 15 months late. The ultimate cost, rather than the delay, is the nub of the current RAAF concern. There is the belief that if the A10 develop- ment turns to a production phase before long, this will affect the higher priorities like AEW and in-flight refuelling capabilities. The RAAF sees a saving of at least $100m if the project is halted soon and a proposal to build under licence is evaluated for progression when RAAF Budget restraints might not be so tight.

It is an attitude of which Mr Beazley is completely aware. At the same time, he is on record as being in sympathy with the development and retention of the aircraft industry in Australia. But he recently acknowledged that if there were cost and other problems with The Wamira Project they would have to be addressed under whatever priorities the Government was prepared to assign.

When the decision was made in favour of the development of an Australian-designed trainer in 1981, it was felt the fatigue life of the CT4 would start running out in 1987 or 1988. The RAAF then believed the CT4 had a fatigue life of 2500-3000 hours. But a rig test at the Aeronautical Research Laboratories at Fishermens Bend, Victoria of the CT4 revealed that it had a safe fatigue life of at least 5000 hours and possibly 10,000 hours. These are regarded as conservative figures for the airframe and wings after using a “scatter” or safety factor applied to the test of the CT4 which did not “break” until the equivalent of about 50,000 hours. Apart from the concem that the CT4 was running out of “life”, there is another reason why the RAAF wants an improved trainer -sooner or later. The aim is to train young pilots for their first 100 hours on turboprop trainers rather than for the current 60 hours on the CT4s. This would achieve considerable cost savings before student pilots move to the Macchi jet trainers and complete 200 hours. The other sought-after requirements are for a more durable aircraft with a fatigue life of 8000 hours, better aerodynamic performance and low maintenance costs.

Just how the competing views of the Air Force, the Office of Defence Production, the trade unions and the aircraft industry and the aim of some degree of self-sufficiency in design capability and manufacture can be unscrambled presents a major hurdle for Mr Beazley and the Federal Government.

(Max Hawkins Is the Editor of Defence Industry Newsletter. )