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Friday, 1 June 1984
Page: 2389

Senator GARETH EVANS (Attorney-General)(4.02) —First of all, in further answer to Senator Durack's previous question, the contract was in two parts-the standing charges, which made up two-thirds of the cost involved, and then the flying charges, which made up one-third. The Government was committed to the standing charges only and the actual flying charges varied on demand. That is the answer in short. No doubt it still leaves questions of details to be pursued , but that is the essence of the contractual arrangement, as I understand it.

In regard to the question of alternative options that Senator MacGibbon has pursued, as he has been doing for some time, the answer that can be given by the Government is really only a repetition of that which has been offered over and over again in the past. It is simply a matter of commercial reality that the particular decision was made in these terms. There had until 30 April been three contracts for civil area coastal surveillance. They were the Skywest one, current until 1986, the Northern Territory Aerial Work one, which expired on 30 April, and the Air-Search one, which also expired on 30 April. By government decision the tenders for the new contracts to replace those expiring on 30 April were not called due to a reduced demand for surveillance from the Department of Health. The identified demand for surveillance could therefore be satisfied, it was felt, determined by the existing contract with Skywest, the terms of which contract have been re-negotiated to provide for that greater area to be covered.

As we understand it, the matter was wholly in accordance with the kind of practice and tendering practice that had been adopted by previous governments. Summary documents which I have here seem to support that assertion. I am further told that the cost of the Litton-fitted Nomad was considerably more expensive than the Shrike, with its SLAR. The Shrike was estimated to be about 60 per cent of the cost of the Nomad, and that was undoubtedly a relevant consideration in producing the solution I have just summarised.