Airservices Australia, the Department of Defence and Thales have signed final contracts to build Australia’s new joint civil and military air traffic management system, known as Onesky.
The ambitious project aims to replace the currently separate civil and Defence air traffic management systems under a single program, with the final contracts, now valued at $1.2 billion, signed last week.
Parts of the new Onesky system are expected to be operating by 2018, with full operating capability expected in 2023, two years later than the original 2021 completion date.
“It’s probably the biggest development in the safe management of Australia’s skies since aviation began in this nation,” Airservices Australia chief executive Jason Harfield said on Monday.
Then federal transport minister Warren Truss named Thales as the successful supplier for Onesky at the 2015 Avalon Airshow.
Since then, Airservices Australia and Defence had been negotiating with the the company ahead of signing formal contracts, with some preliminary work undertaken via a series of advanced work orders.
Airservices said on Monday that substantial progress had already been made.
“In 2017, we commenced installation of the first phase of the new voice communication system, which will be commissioned later this year,” Harfield said.
“We have also completed the system requirements review in January, which means Airservices, Defence and Thales have a common agreed understanding of the system’s requirements.
“This has significantly reduced risks in the project prior to finalising the commercial and contractual arrangements. Reducing uncertainty in system requirements prior to finalising the contracts was a critical risk reduction strategy developed to address the challenges that other major overseas air traffic control providers experienced with their own system replacements.”
A project of concern
Negotiations between Airservices Australia, Defence and the French-headquartered aerospace and defence company had become increasingly protracted, with the project placed on Defence’s Projects of Concern list in August 2017.
Defence, where Onesky is referred to as Project AIR 5431 Phase 3 Civil Military Air Traffic Management System, and Airservices Australia are jointly funding the Onesky project.
“This is a highly complex, inter-departmental project of national significance that has experienced some substantial challenges getting into contract,” Minister for Defence Senator Marise Payne and Minister for Defence Industry Christopher Pyne said in a joint statement at the time.
“The challenges revolve around issues with ensuring value for money for the taxpayer.”
However, Senator Payne said on Monday Onesky would now be taken off the list following the execution of final contracts.
“This project will replace the ageing military air traffic management systems and is essential to ensuring our ADF can continue to operate safely in Australia’s airspace,” Minister Payne said in a statement.
“As a result of reaching this important milestone, Onesky will be removed from Defence’s Projects of Concern list.”
Value for money?
The question of Onesky’s value for money had been highlighted by an Australian National Audit Office (ANAO) report published in April 2017 that suggested Australia could end up paying too much for the project.
Specifically, the ANAO was critical of how the tenders were evaluated.
“It is not clearly evident that the successful tender offered the best value for money,” the ANAO report said.
Further, the ANAO said it was “not clearly evident that the successful tender is affordable in the context of the funding available to Airservices and Defence”.
However, in an interview with Australian Aviation Harfield defended the robustness of the Onesky tender evaluation process while conceding that contract negotiations had taken longer than anticipated.
“Value for money . . . is not just the price that you pay. You’ve actually got to have the thing work and operate, and there are much more greater considerations with value for money,” Harfield told Australian Aviation in May 2017.
The Airservices chief noted there were five different assessment criteria in the Onesky tender: safety, technical risk, transition arrangements, long-term relationships and financial and commercial considerations.
“With an air traffic control system, you can’t say that all of those are equal … in a ranking. You’ve got to put it all together and look at it,” Harfield said.
“So you could have somebody really strong technically but very weak on the transition between the two systems. Well, that transition is just as important as making sure that the system works.”
Airservices’ most recent five-year corporate plan noted “Onesky and its enabling projects account for $652 million” in capital expenditure over the next five financial years, through to the end of 2021-22, while Defence had previously capped its own financial commitment to the project via a “not to exceed” price of $244 million.
However, in October Rear Admiral Tony Dalton told the Senate Foreign Affairs, Defence and Trade committee that Defence’s share of the program could be higher than first expected.
“Our contribution to the overall Onesky program may need to increase. We have made some allowances in the revised Integrated Investment Program to accommodate for that increase. Our negotiations with Airservices have said that there’s a finite amount of money that we’re prepared to increase,” RADM Dalton, who is general manager ships at Defence’s Capability Acquisition and Sustainment Group (CASG) but retains responsibility for Defence’s portion of the Onesky program, told the committee.
At the time RADM Dalton explained that the delay in signing contracts was one reason Onesky was added to the Projects of Concern list, and that further delays might force Defence to seek an alternative supplier to replace its existing Australian Defence Air Traffic System (or ADATS).
“Well certainly the timeframe has slipped. That’s been part of the issue and that’s why it’s been elevated to a Project of Concern,” RADM Dalton said.
Some pain, now for the gain?
While contract negotiations for Onesky have taken three years, the promise of an integrated civil and defence air traffic management system will still be “transformative”, Harfield says.
“Onesky is game-changing. It is transformative, not only for air traffic management in Australia, but worldwide there is nothing like it,” he said on Monday.
“This state-of-the-art system means for the first time, civil and military air traffic controllers will share the same integrated air traffic management system, using the same information to jointly manage 11 per cent of the world’s airspace for which Australia is responsible.”
Thales Australia chief executive Chris Jenkins said Onesky was a large and complex project that required the highest levels of safety and security.
“Both Airservices and the Air Force are to be commended for their rigorous approach, fully defining the system requirements, acceptance criteria and schedule ahead of contract signature,” Jenkins said.
“This is best practice for a complex critical infrastructure project such as Onesky.”
Meanwhile, Minister for Defence Industry Pyne noted the Onesky project would support 450 specialist jobs in Melbourne. Further, about 75 per cent of the acquisition cost and 95 per cent of ongoing annual support costs would be to Australian companies.
Airports Association calls for swift implementation
The Australian Airports Association has welcomed the signing of the Onesky final contracts on Monday, but called for the “swift implementation of the new technology to support the national aviation network”.
“OneSKY will deliver significant benefits to our industry, and we look forward to following the project’s progress over the coming months,” AAA chief executive Officer Caroline Wilkie said on Monday.
“Its swift implementation is essential to support the significant investment of airports on the ground and ensure our economy is not constrained by delays and interruptions across the national network.”
Noting that several airports are investing, or planning to invest in new runway capacity, Wilkie said that Australia “must ensure our airspace infrastructure keeps pace with investment on the ground.
“Today’s announcement is a positive step forward in ensuring a strong national aviation network for the future.”
Certainly that “strong aviation network” is the promise of Onesky, as this Airservices Australia corporate video on Onesky explains:
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