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Monday, 4 June 1984
Page: 2424

Senator GARETH EVANS (Attorney-General)(3.54) —In the Committee of the Whole on 1 June 1984 I was asked a series of questions by Senator Durack and Senator MacGibbon. To assist them in their understanding of the coastal surveillance contracts it may be pertinent if I make the following points orally as well as tabling for their information formal answers to some of the questions , which I now do. Additional information has been supplied to the Senate Estimates Committee in respect of the coastal surveillance arrangements, the technical aspects of the radar to be used on the surveillance flights and the manner in which the existing contracts with Skywest Airlines Pty Ltd were able to be varied. Many of the points raised were answered on 1 June but to bring them all together it may be helpful to include in Hansard a general statement on the whole matter, which I do now.

The contracts with AireSearch Surveys Pty Ltd and Northern Territory Aerial Work expired on 30 April 1984. The contracts with Skywest are current until March 1986. Under the terms of the latter contracts, the tender documents having been tabled on 1 June 1984, the geographical areas of surveillance can be varied as well as general terms and conditions. The Commonwealth is contractually obligated to Skywest until March 1986 within the terms of the contract. It was possible, because of the variation of the needs of user departments, to vary the Skywest contract to cover the geographical areas previously covered by AireSearch Surveys Pty Ltd and Northern Territory Aerial Work. The variation could be effected within the scope of the Commonwealth's existing contractual obligations to Skywest.

Following the report by the Hon. Kim Beazley, Minister for Aviation and Minister Assisting the Minister for Defence, it was decided to vary the Skywest contract so that it covered the surveillance of the Great Barrier Reef, previously undertaken by AireSearch. In this respect the Shrike Commander to be flown on that task was to be fitted with a side-looking airborne radar, or SLAR for short. The cost of leasing the SLAR was to be met by the Commonwealth under the contractual arrangements. It was decided that this fitment, together with the forward looking radar with mapping mode which is fitted to the Shrike, was a cost-effective means of carrying out the surveillance task. The terms of the tender documents required by that aircraft to be used by tenderers be fitted with weather radar with a mapping mode capable of determining a 20 metre craft at 20 nautical miles.

The original contracts did not contain clauses which gave to the successful tenderer exclusive rights to a particular geographical area. It was open to the Commonwealth within the terms of the contracts to require the contractors to redeploy aircraft to any geographical area. Contracts were drawn up on the basis of a successful tenderer having a certain number of aircraft available at predetermined locations.

The Skywest contracts before variation were based on standing charges for a total of 14 aircraft in Western Australia, the Northern Territory and Queensland , with a separate charge being levied in respect of actual flying hours. Although there was an indication of the number of hours a contractor was expected to fly, there was no guarantee of payment for a minimum number of flying hours. Payment was based solely on the actual hours flown. The question of profitability of Skywest operations was not a factor in determining whether there would be a variation of the contracts held by Skywest as the Government is committed to the standing charges in any case because the profit margin is built into the standing charges, not the flying charges.

It was decided not to call for new tenders on expiration of the NTAW and AireSearch contracts because there are 14 aircraft available to the Government until March 1986 under Skywest contracts. These can undertake the whole of the revised task.

Much has been said about the comparable merits of the Nomad fitted with Litton radar and the Shrike Commander fitted with SLAR. The Shrike fitted with SLAR costs approximately two-thirds of the cost of the Litton-fitted Nomad. The SLAR was assessed as an effective radar surveillance tool on the basis of published information on its years of use in other countries fitted to small commercial aircraft including Shrike Commanders. The combination of Shrike with its forward -looking weather radar and ground mapping mode together with SLAR was judged to be effective and less costly for Great Barrier Reef operations than the Litton- fitted Nomad Searchmaster. The SLAR fitted to the Shrike is being evaluated over the next six months. This method follows that which was employed in evaluating the Litton radar when the Nomads fitted with it were first brought into operation.

The costs of the two systems vary considerably. The annual cost for the Litton- fitted Nomad Searchmaster, based on charter rates for the operation during 1983- 84, is $1,339,500. The Shrike Commander with SLAR has an estimated annual cost of $750,000.

Contract charges are divided into two parts: Standing charges relating to the provision of aircraft and hourly flying charges related to their operation. Charges include components covering capital cost of equipment of about $500,000 for Litton and a maintenance charge for it of about $100,000 per annum. The SLAR has been fitted to a Shrike Commander under a leasing arrangement between Ericsson, the manufacturer, and Skywest. The annual leasing charge for the equipment including maintenance is about $96,000. Had the SLAR been purchased the capital cost would have been $200,000 with an estimated maintenance charge running at about one-fifth of the maintenance charge for the Litton. I am happy to make that statement, the text of which I have only one copy of, available to the two honourable senators with an interest in this matter. Hopefully that will answer such outstanding questions as it is possible for the Department to answer at this stage.