SYDNEY, July 2 (Reuters) – Australia announced changes on Thursday to the way it manages the delivery of defence projects, aiming to curb billions of dollars in cost overruns and lengthy delays.
• The government said it would establish a special agency to oversee defence project delivery, overhaul the way project costs are assessed, and streamline decision-making by cutting bureaucracy.
• The decision comes as the country undertakes a major build up of its military capacity, with projects including the AUKUS nuclear submarine pact, a continuous naval shipbuilding programme and investments to develop domestic missile and drone industries.
• “For too long, Defence has struggled to deliver major capability projects on time and on budget,” Pat Conroy, minister for defence industry, said in a statement.
• In a speech in Canberra unveiling the reforms, Conroy described the department’s systems as “broken”.
• “The fact is these systems were designed for a very different world,” he said. “Through these reforms, we’re making sure that when Defence is developing capability projects that we’re setting them up for success.”
• He said an internal review found the average cost of defence projects increased by 38%, or A$29 billion ($19.97 billion), from project conception to government decision.
• “The way Defence was operating had become outdated and compromised for at least the last decade,” Conroy said.
• The government in April announced it would raise defence spending to 3% of gross domestic product by 2033 from about 2%.($1 = 1.4520 Australian dollars)
(Reporting by Christine Chen in Sydney; Editing by Raju Gopalakrishnan)
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