By Jordan Chong
Australia’s Project AIR 5431 Phase 3 Civil Military Air Traffic Management System, or OneSKY, has been taken off government’s Projects of Concern list after the signing of final contacts by Airservices Australia, Defence, and Thales to build the joint civil and military air traffic management system.
The $1.2 billion project, which aims to replace the currently separate civil and Defence air traffic management systems under a single program, was placed on the Projects of Concern list in August 2017. However, Minister for Defence Marise Payne said on Monday OneSKY would be taken off the list following the execution of the final contacts.
“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 on February 26. “As a result of reaching this important milestone, OneSKY will be removed from Defence’s Projects of Concern list,” Minister Payne said.
Airservices Australia said on Monday the final contacts for the $1.2 billion OneSKY project were signed “this week”. “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 in a statement.
The federal government named Thales as the successful supplier for OneSKY at the 2015 Avalon Airshow. Since then, Airservices Australia has been negotiating with the company ahead of signing formal contracts, with some preliminary work undertaken via a series of “advanced work orders”. Its statement on Monday said 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,” he added. “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.”
Defence and Airservices Australia are jointly funding the OneSKY project. Negotiations between Airservices Australia and Thales had became increasingly protracted, as an Australian National Audit Office (ANAO) report published in April 2017 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, adding it was “not clearly evident that the successful tender is affordable in the context of the funding available to Airservices and Defence”.
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 financial commitment at a “not to exceed” price of $244 million, RADM Tony Dalton told the Senate Foreign Affairs, Defence and Trade committee in October 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 now 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.
Parts of the new OneSKY system were expected to be operating by 2018, with the full operating capability expected in 2023, two years later than the original 2021 completion date.
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,” he said in a statement. “This is best practice for a complex critical infrastructure project such as OneSKY.”
Minister for Defence Industry Christopher 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.