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Ship purchase 'wishful thinking'HANK SCHOUTEN - The Dominion Post
Friday, 12 September 2008
The project to design and purchase the Navy's new $177 million multi-role ship HMNZS Canterbury was poorly managed and marked by collective wishful thinking, according to a review of the project released today.
British naval expert John Coles also found that the ship needs remedial work, limits will have to be put on her operations and her rough seas performance is likely to be poor.
Mr Coles was commissioned to review the ship acquisition.
He said Canterbury was unlikely to meet all the contract requirements.
The ship has been tied up in Auckland for months pending modifications.
Mr Coles said in his report that HMNZS Canterbury was intrinsically safe but remedial work would required to enable her to perform military functions.
www.stuff.co.nz/dominionpost/4690388a6479.htmlRelease of the Coles Review of the safety and functionality of HMNZS CanterburyMinistry of Defence Media Release
12 September 2008
In December last year, I ordered an independent expert review into the acquisition and introduction into service of the Navy’s multi-role vessel Canterbury.
In particular, I wanted to know whether there were safety concerns about the ship’s operation, design or performance. The followed the death at sea of Byron Solomon, the loss of one of the ship’s seaboats and speculation the ship was not safe.
I wanted to know whether the ship was capable of performing the tasks for which it was acquired.
I was aware of a number of performance issues which suggested that as delivered the ship fell short of what New Zealand had contracted for. I wanted confirmation that we were aware of all problems and that these were capable of remedy.
Finally, I suspected that management of the acquisition was not carried out as well as it might have been. I wanted to know what the shortcomings were and the lessons Defence needed to learn from this.
I wanted a reviewer with the expertise and independence which would give me and the public full confidence in its findings.
The setting up of the Review and the terms of reference were announced publicly and the Review today is being released in its entirety.
The professional experience and expertise of the Chief Reviewer John Coles ensures the report has credibility.
I welcome his key finding that the HMNZS Canterbury is an intrinsically safe vessel and that the ship will, with remedial work, deliver the capability required by the Royal New Zealand Navy.
In his letter of referral, Mr Coles states: “I am confident in respect of HMNZS Canterbury that an appropriately governed and resourced get well programme will provide the NZDF with a cost effective versatile and valuable military capability throughout its service life.”
That confirms, independently, the advice I have received from the Chief of Navy, the Maritime Component Commander and the ships’ Captain about the ships’ capability.
I am also relieved to receive his confirmation that the ship’s design and performance were not responsible for the tragic death of Byron Solomon. I again however extend my sympathy to Byron’s family for their loss.
John Coles’ view is that with remedial work at a relatively modest cost Canterbury will provide the capabilities we require.
The Canterbury was acquired predominantly for its sealift capability to transport troops and equipment to security and peacekeeping deployments, and support operations such as disaster relief in the Pacific.
Its further roles were additionally to act as a training ship and back up the other six ships in the Protector Fleet, and the two Frigates, in patrol and surveillance roles.
The Coles Review notes that in the latter role in seas states of level six (18 foot waves) it will need to be operated with some constraint. It is a safe ship but not comfortable, in a similar manner to other ships built to this design.
I welcome the finding of the Review that Canterbury represents a value for money investment. John Coles confirms that the ship is significantly less expensive than similar modern warships on offer.
The review confirmed but found no new problems to those already identified by Defence. It notes a further, relatively small investment – around $20 million – will be needed to remedy problems.
Where these represent non-performance of contract, Defence will seek to have those costs met by the contractor under warranty. Defence is currently discussing these issues with BAE which has taken over from Tenix.
As these are commercially and legally sensitive issues, I do not wish to go into any detail. I would note the Reviewer’s belief that all are capable of remedy within a relatively short time frame.
Secondly, I acknowledge the findings of the review on the manner in which Defence governed and managed the acquisition process.
This left a lot to be desired. It was not adequate. Among other things the project team underestimated the complexity of their task, lacked the size and the skills needed, placed too much emphasis on the timeframe for delivering the project at the expense of resolving performance shortfalls and did not understand the constraints imposed by the ship’s design.
The ship should not have been accepted until it fully met the requirements of the contract.
These are all lessons to be learned for the future. I welcome acceptance by Defence of its shortcomings and commitment to take on board the Reviewer’s recommendations.
Along with this report, I am releasing their advice on how they are implementing the Reviewer’s recommendations.
Finally, on the wider Protector Fleet issues.
The Inshore Patrol Vessels and Offshore Patrol Vessels have undertaken sea trials and performed extremely well.
The delay in delivery of these ships has primarily been due to a question of the ship’s seaboats and Lloyds Certification.
This issue is under negotiation with BAE. Once this issue is resolved, those ships, which have completed their sea trials, can be accepted.
Replacement seaboats for the Canterbury are on order and will be delivered in a matter of weeks.
To protect our contractual position and deliver the best outcome for the Navy and the taxpayer it is important that Defence accepts the other vessels only after the issues are resolved.
I would like to thank John Coles and his team for the thorough review they have delivered and invite him now to speak to his report.
www.nzdf.mil.nz/news/media-releases/20080913-rotcrotsafoh.htm
