Planes and patrol boats running two years late

Three defence projects – an upgrade of the air force Orion and Hercules fleets and delivery of the navy's two new offshore patrol craft – have been further delayed and are now running about two years' late.

The $352 million programme to put new radar, electronic surveillance, data management, navigation and communication equipment on the air force's six Orions is at least 18 months behind schedule, deputy secretary of defence Des Ashton says.

Work on the first upgraded Orion was to have been completed in the United States by the end of last year, but a lengthy flight testing programme was only about half complete. "It will be [delivered] next year, but I won't put a date on it till we've got through a little more of the flight testing."

Delays were caused by the project's complexity and the need for a contractor to integrate computer software systems, Mr Ashton said.

Work on upgrading systems on a second Orion has started at Safe Air in Blenheim.

The $255m project to extend the life of the five C-130 Hercules is now also running about two years' late. The first extensively refitted aircraft was due to be completed by the middle of last year, but it is not now expected until next year.

Delivery of the navy's two 1600-tonne offshore patrol craft is more than two years behind schedule – they were to be completed in May and October 2007.

Mr Ashton said he still hoped the first would be delivered by Christmas. The ships have been held up by warranty and mediation talks with BAE Systems (formerly Tenix), the Australian company awarded the $500m, seven-ship Project Protector contract.

The ships are heavier than they are supposed to be and not enough allowance has been made for the weight of extra equipment to be added.

Contract issues with the Project Protector fleet also involve the multi-role ship Canterbury and the four inshore patrol craft.

Mr Ashton said no decisions had yet been made on modifications to the Canterbury – particularly new stowage arrangements for rigid-hulled inflatables which had been damaged or lost in stormy weather.

The $500,000 Zodiac rigid-hulled inflatables, which the navy bought to replace originally supplied models, were also still part of warranty talks.

Defence Minister Wayne Mapp said he expected to announce when the offshore patrol craft would be delivered, after mediation with the ship builders. The talks involved tens of millions of dollars.

The delays pointed to a lack of capability in defence to manage these complex projects, and he said the Defence Review would look at how procurements could be managed better.

Labour defence spokesman Pete Hodgson said the delays were "comprehensively unsatisfactory". Parliament's foreign affairs and defence select committee needed to investigate because holdups were no doubt causing problems for the Defence Force.