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Senator MARGETTS --Under division 181 on both page 104 of the annual report and page 84 of additional estimates, you give an indication that the responsibility for maintaining the Army's aircraft has been shifted at least partially to the Air Force. Can anyone expand on the shift and indicate to what extent ASTA or Rockwell continue to be involved in this bit of the maintenance that has been passed on to Air Force?

Air Vice Marshal Rogers --Could you repeat the page of the additional estimates?

Senator MARGETTS --Page 84 of the additional estimates?

Air Vice Marshal Rogers --That says transfer from the Army program all the efforts that we put in on behalf of the Army. Senator, you may recall the answers given by Brigadier Mellor earlier on in that there were some funds identified within the Air Force baseline, and also additional funds, for the get well program on Army aviation of which he is the director-general.

Senator MARGETTS --So that part of the maintenance has been transferred to Air Force; is that right?

Air Vice Marshal Rogers --Air Force has always had the responsibility for the logistic support of Army aircraft--not the maintenance. That is done by the Army at the unit. But we have a user agreement between the CAS and the CGS for the joint user support of Army aircraft and that is an Air Force responsibility.

Senator MARGETTS --Do ASTA or Rockwell continue to be involved with that arrangement at all?

Air Vice Marshal Rogers --I would defer to Brigadier Mellor on the actual contracts. It was raised earlier on that ASTA used to do the major maintenance on the Black Hawk and I think that Brigadier Mellor mentioned earlier that that contract had changed to Hunter Aviation but that some ancillary parts were still being done by ASTA, which is now a subsidiary of Rockwell.

Senator MARGETTS --It mentions on page 84 that around $15 million of money has been transferred from Army to Air Force. Is this a different figure from the $25 million funding for Black Hawk spares or is it part of that? Do any of those figures overlap?

Mr Preston-Stanley --The items you are referring to on page 84 are a reflection of additional activity being carried out in the Air Force for the Army over that which was planned to occur this year. In part, it is a reimbursement of some funds that we expended on their behalf and they have transferred in to us. The figure of $10 million is part of some expenditure that was undertaken late last year and effectively borrowed from this year. The figure of $4.4 million is for some extra parts which were identified as being needed in the money to be spent this financial year.

Senator MARGETTS --I need to clarify this. Was any transfer in either direction, from ASTA/Rockwell or to ASTA/Rockwell, involved in these figures?

Mr Preston-Stanley --I am not aware of that.

Senator MARGETTS --And the Air Force has always been part of this involvement?

Mr Preston-Stanley --This represents expenditure undertaken through the Army Aviation Logistics Management Squadron in support of activities covered predominantly by the army aviation function.

Senator MacGIBBON --Page 122 of the annual report says: Five additional deeper maintenance servicings on the P3C . . . were arranged to recover the deeper maintenance schedule and overcome slippage caused by the additional workload required to rectify substantial corrosion.

It is on substantial corrosion that I want to ask a few questions. We bought a P3B to replace one that was burned?

Air Vice Marshal Rogers --That is correct, Senator. We had the P3Bs before we had the Cs.

Senator MacGIBBON --We bought the B about 24 months ago as a training aircraft, did we not? I raised the matter of corrosion then and was assured that it was no problem. I certainly raised quite strongly the matter of corrosion in the P3Cs at the time the big update program that follows on from ESM had been raised. I think I raised it with this committee, I certainly raised it with senior people in Air Force, and I was assured that they were as clean as a whistle, that there was not a problem of corrosion anywhere. What is the extent of this substantial corrosion that is referred to?

Air Vice Marshal Rogers --Mr Chairman, I cannot answer the senator's question directly, but I can give him the background information. I am not sure of the time he is referring to. A couple of years ago I was aware that there was a corrosion problem with the P3s, and that has been since rectified, and now there are no problems with the corrosion of the P3s that are affecting aircraft availability.

Senator MacGIBBON --Have you read this paragraph?

Air Vice Marshal Rogers --Yes, I have.

Senator MacGIBBON --It talks about the rectification of substantial corrosion, not minor corrosion. You always expect a bit of corrosion, but substantial has some implications.

Air Vice Marshal Rogers --I will ask Air Vice Marshal Collins to address that, if possible.

Air Vice Marshal Collins --Before this current job, I was Air Officer commanding Logistics Command, which bears responsibility for activities that I will be talking about. P3Cs will always corrode. They are made of a material that corrodes and rots, and they operate in a very demanding environment--low down, over the sea. They are subject to routine maintenance, every three to four years, and that maintenance is intended to keep the corrosion in check.

We identified that we needed to put a specific program in place to correct corrosion that was getting out of check before we started into the major refurbishment and upgrade programs. These five aircraft that are mentioned here are additional to those which were normally programmed to be done during the time period we are talking about. I would not make the statement that they are as clean as a whistle. I doubt if anyone in an authoritative position in the Royal Australian Air Force could make such a statement about a P3, used the way we use it.

Senator MacGIBBON --It was precisely because of the operational experience with those aircraft and the corrosive environment in which they operate that I raised the question in the first place. Can I have amplification that there was a program in place for routine maintenance but five extra aircraft were put in? If they were extra aircraft, does that mean that the corrosion preventative cycle fell down, that five extra aircraft had to go through it?

Air Vice Marshal Collins --No, it does not indicate that the preventative cycle broke down. It does indicate that we recognised that we had to correct the corrosion problems that we had identified as impacting on fleet availability before the upgrade programs also impacted on fleet availability. In effect, we said that we had to get this problem out of the way, because the upgrades that are being done on the aircraft right now and will continue through to the end of the century will also impact on availability.

Senator MacGIBBON --Can we say that the steps that have been taken will overcome the problem and there will be no limitation in the life expectancy of the airframes for the ESM and the upgrade program? In other words, are we going to get our money back or are we going to be compromised?

Air Vice Marshal Collins --We are going to get our money back. We are not going to be compromised. But, as I pointed out a few minutes ago, the P3 airframe will always corrode. One of the challenges--you have heard about our approach to airworthiness--is to ensure that that corrosion does not reach an unsafe state from an availability, economic or eventually safety viewpoint.

Senator MacGIBBON --You can assure the committee then that the maintenance of the airworthiness of the aircraft when they are modified for the ESM and the upgrade program will not become commercially impossible for us?

Air Vice Marshal Collins --That is our objective, Senator, but it is a little hard to predict the future.

CHAIR --Thank you. As there are no further questions, that completes subprogram 4.3. We now move onto subprogram 4.4.