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Joint Committee of Public Accounts and Audit
Auditor-General's report No. 19 (2020-21) Defence Major Projects Report 2019-20

BOTTRELL, Major General Andrew, Head, Land Systems Division, Department of Defence [by audio link]

COGHLAN, Major General David, Head, Armoured Vehicle Division, Department of Defence [by audio link]

CONNOLLY, Colonel Tim, Deputy Commander, Army Aviation Command, Department of Defence [by audio link]

DALTON, Mr Tony, Deputy Secretary, National Naval Shipbuilding, Department of Defence [by audio link]

DENNEY, Air Commodore Robert, Director General Air Combat Capability, Department of Defence [by audio link]

FAIRWEATHER, Mr Shane, First Assistant Secretary, Helicopter Systems Division, Department of Defence [by audio link]

FRASER, Mr Tony, Deputy Secretary, Capability Acquisition and Sustainment Group, Department of Defence [by video link]

GOULD, Brigadier Warren, Director General, Systems and Integration, Department of Defence [by audio link]

HARVEY, Mr Coan, Assistant Secretary, Capability Advice and Analytics Branch, Department of Defence [by audio link]

HEHIR, Mr Grant Hehir, Auditor-General, Australian National Audit Office [by video link]

HOFFMANN, Air Vice-Marshal Gregory, Head, Aerospace Systems Division, Department of Defence [by audio link]

IOANNOU, Dr Tom, Group Executive Director, Australian National Audit Office [by video link]

KARO, Mr Ciril, Group Business Manager, Capability Acquisition and Sustainment, Department of Defence [by audio link]

KING, Brigadier Jeremy, Director, General Platforms, Department of Defence [by audio link]

PAGE, Ms Michelle, Executive Director, Australian National Audit Office [by video link]

ROBERTS, Air Vice-Marshal Catherine, Head, Air Force Capability, Department of Defence [by video link]

RUSH, Ms Francesca, Assistant Secretary, Commercial General Counsel, Department of Defence [by audio link]

SMITH, Rear Admiral Christopher, Deputy Chief of Navy, Department of Defence [by video link]

STUART, Major General Simon, Head, Land Capability—Army, Department of Defence [by video link]

Committee met at 09:05

CHAIR ( Mrs Wicks ): I now declare open this public hearing of the Joint Committee of Public Accounts and Audit in reference in reference to the inquiry into the Defence 2019-20 Major projects report. I'd like to thank witnesses for being here today. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. Would representatives from either the ANAO or the Department of Defence like to make an opening statement before we move to questions from the committee?

Dr Ioannou : We weren't planning to make a statement, but I do note that we circulated a short background document yesterday. It was just to summarise the issues.

Mr Fraser : We do not have an opening statement. We provided a recent update to the committee as a position. I will just note that there are many changes, obviously, in our domino-ic world since the completion of the Major projects report. That's it.

CHAIR: We have questions from the committee. I'm happy to start. I might also invite Senator Scarr to start, if you have any questions.

Senator SCARR: Yes, if I could, that would be good, Chair. In the first instance, I was interested in general observations as to how the major projects have been tracking, given the impact of the COVID-19 pandemic, in particular in terms of schedule over the reporting period.

Mr Fraser : I might start, if that works. Since the onset of the pandemic in March of last year, really, and the initial impacts, I've been very proud of how Defence and industry have safely been able to continue to equip and sustain the Australian Defence Force. I would note that the recent outbreaks of the delta variant pose a significantly increased risk and impact to us all. In order to sustain Australian industry, Defence worked in partnership to recognise payments, in particular, and to look after Australian small business. Since 23 March last year this has been to the value of $31 billion for work that has been achieved, and we paid that in from two to five days really, amongst other work, and, importantly, that flowed down to the small businesses.

We're seeing current impacts on things like ship maintenance and others, where we're managing as best we can but it is having some impact. On the overseas supply chain there is also some impact on some of the production and supply work. Until recently, the impact has been around three to six months. Some of those projects have been impacted but some have not and we've been able to manage to continue them quite safely. But we're seeing that growing risk and growing impact. I'll pause there, thank you.

Senator SCARR: I note your comment about the impact of three to six months. Have there been any projects which have been impacted more than others, and what's the trigger for that, what are the particular attributes of those projects which have been impacted, schedule wise, more than some of the others?

Mr Fraser : I'll defer to Mr Dalton on the shipbuilding but I'll give you a summary. We split shifts, for example, and work our way through it with cleaning and other things in between. General Coghlan will be able to talk to the Boxer armoured vehicle program. There is a production facility but it's in multiple different areas, so the pandemic might be managed appropriately and production resumed in one location for certain components but there would be an impact in another one a month or two later to that, because they're slightly out of sequence. That's around a six-month impact and is on the higher end of them. For Joint Strike Fighter, to give you an example there, with the Lockheed Martin facility in the United States the United States government paid a significant increase in funding to them, to run split shifts and cleaning in between them to enable them to continue. There are some projects that have been more isolated, in single facilities, that have been able to continue. I'll pause there and see if Tony Dalton has anything else on the shipbuilding one.

Mr Dalton : In the period that's under review, the 2019-20 MPR, the effect of COVID in Australia was relatively mild on the shipbuilding programs. When the ANAO publish the next MPR you will see the effect of COVID starting to impact more greatly on the Australian shipbuilding programs. But if you look at page 275 of the 2019-20 MPR you can see that the effect of COVID in Europe was more pronounced, earlier than in Australia. The shipbuilding program that we had running in Spain at the time was reflecting COVID related delay in the 2019-20 MPR; that's the supply class replenishment ship program. The shipyard at Ferrol was quite badly affected by COVID in Spain. All of Spain was quite badly affected by the initial outbreak of COVID, in the early part of 2020, and that did create a delay to the supply class replenishment program. In fact, the shipyard in Ferrol was shut down for four months and then reopened quite slowly afterwards. That has induced a six-month delay to that particular program and is reflected in the 2019-20 MPR.

If you look at the Arafura program, which starts on page 203 of the MPR, the program is potentially flagging risks around the probability of COVID related delay, particularly for the two ships that are more advanced in production at Osborne in South Australia. We were flagging in the 2019-20 MPR that there would be some delay. The issue that we have with that is two-fold. One is the international supply chain. It was starting to be affected at the end of this reporting period in mid-2020. We were seeing that start to flow through particularly in the Arafura class or fuel patrol vessel program, which is further advanced. The physical distancing rules that Australia was putting in place in the middle of 2020 was starting to impact that program. As you can imagine, as you build a ship, you create the compartments. As you build more compartments, it becomes more complex. Those compartments then become a physical limiting space, and the number of people that you can put inside the compartment and comply with the physical distancing rules that were being put in place towards the middle of 2020. It was starting to slow down production on that particular program. You will see that when the ANAO publishes the next MPR later on this year. You will see how that has flowed into that particular project as well.

With regard to what we're looking at today with the 2019, they're the two programs I would highlight where we were flagging COVID related delay in the programs that are actually in construction.

Senator SCARR: I don't want to particularly gazump the next MPR when it comes out, because, as you rightly say, we're looking at the 2019-20 year, but, in relation to shipbuilding—and that was very useful commentary from you; I do appreciate that—presumably you're looking at strategies or tactics to try to make up that lost time in the schedule. However, you've got to be careful not to compromise the processes and procedures you need to go through at the same time. I'm interested in getting some general comment about your thinking with respect to how to accommodate or try to accelerate parts of the schedule to accommodate the fact that your time line has been pushed out due to something outside of your control.

Mr Dalton : We will flag some of this in the next MPR and probably subsequent MPRs for a couple of years, I expect. There are things already that we're putting in place towards the end of this reporting period: split shifts, multishifts and all of the shipyards having implemented COVID-safe work practices. They're doing temperature testing for workers on arrival. In fact, right now in Sydney in the sustainment space, we're doing rapid antigen testing for workers on arrival. So we are looking at ways to live with the COVID reality that we have. There is a gap between shifts. They're not a seamless handover anymore, because there is a cleaning period that happens on those shifts. The other thing is that these are multiship programs, so with the supply replenishment to ships it is very hard for us to recover the schedule on those two ships. But we have been able to hold the final operational capability milestone for those. Perhaps the Deputy Chief of Navy might like to talk a little bit about that later on, but we're adapting the multiship program so that, if we do lose schedule on the first ship or the first two ships, we then create the opportunities to regain that. And it doesn't flow through the whole program, so the ships that are later on in the program—we're adapting the processes so they actually commence on time and are delivered on the original schedule.

Senator SCARR: Excellent. We might stick with shipbuilding for the moment. I noted in the report that there's a reference to a pause to independent assurance reviews. I'm wondering if that's impacted the shipbuilding projects in particular. Given how important the independent assurance reviews are, what strategies have been implemented to get them back up and running as quickly as possible again to recover time or schedule around independent assurance reviews?

Mr Dalton : I might let Mr Fraser touch on that, but we are still doing independent assurance reviews. We are still doing the independent assurance reviews in the shipbuilding program. Mr Fraser can talk more broadly about how we have managed that over the period.

Mr Fraser : I temporarily suspended that workforce—it was only a temporary suspension of the independent assurance reviews—to use those personnel to assist in the establishment of a dedicated defence industry support cell under our COVID task force. One of the things that we also developed was a recovery deed. Our experience or observation of the US and others was that they very quickly defaulted to legal proceedings rather than our focus of concentrating on continuing to deliver the projects and the sustainment. We've worked our way through that in a managed sense so that we're able to continue industry and our primary reason to equipment sustain defence. So those independent assurance reviews have resumed.

Senator SCARR: You mentioned the recovery deed. What elements did that have? From an overall summary point of view, what were the principles contained in the recovery deed? What were the rights and obligations of the parties in the recovery deed you mentioned?

Mr Fraser : I will start and defer to Ms Rush to assist us, but, in essence, it was an obligation on industry to make good wherever we possibly could. For those genuine, provable issues of additional cost such as, as Mr Dalton indicated, split shifts and cleaning in between, we made some allowance that we would cover. But I will defer to Fran. Could you assist the senator?

Ms Rush : Of course. The recovery deed takes the form of a standstill for a period of time, which allows a series of prime contractors. We put in place a number of deeds at that prime contractor level so that the primes could demonstrate what actions they were taking at that contractor level in terms of what their business continuity plans were and then put in place over time and throughout the majority of 2020 mitigation strategies in how they were looking to ensure that they continue to form their obligations and then make an assessment of what contracts and what capabilities were actually affected by the COVID impact. Each contractor had a different regime, and then we looked at each contractor in the context of particular contracts to test what the impact was. I will say that it actually varied between contractors. What we did find throughout 2020—and this has obviously held us in good stead for 2021—was that there were a number of capabilities that were not materially affected at all and therefore there wasn't any consequential contract impact on schedule or cost. Does that answer the question?

Through 2021 the deed has been helpful because it already has the mitigation strategies put in place and the contractors have looked to continue to perform their obligations under that, so it gave us a lot more transparency of what particular impacts were on particular programs.

Senator SCARR: Is it fair to say then that that recovery deed structure set up the principle that a prime contractor would work together through this period and that it has worked quite effectively in terms of identifying issues and then working out mitigation strategies?

Ms Rush : That's a fair comment. It also meant that we looked at the entire strategy for each contractor once, looked at how it impacted on the whole business and worked out what strategies they'd taken. It was very effective in terms of us trying to just keep the contractors focused on what they had to deliver from a capability perspective and, obviously, within the confines of health orders, for example.

Senator SCARR: This is my final question on this, and then I might pass back to the chair. I'm interested in the process by which you're going to transition out of the architecture of the recovery deed back to the principles and obligations as they were in the original contracts. Is that transition back to the original obligations clear, or is there going to have to be some negotiation as you transition out of the recovery deed back to the original contracts?

Ms Rush : The recovery deed standstill period, for example, finished at the end of December. We have been progressively working through those contracts that were affected. I think, other than a handful of examples, we've probably worked out what the consequences were. We will continue through this time period to have additional impacts of COVID because, particularly in New South Wales and Victoria, there will be different impacts, but we're pretty well set to understand how contractors are mitigating those impacts. I don't think we'll have a really long lag time making sure that the contractors are back on schedule performing, and we've got a better sense of exactly what the cost impact of COVID has been.

Senator SCARR: Excellent. Thank you, everyone, for those answers. They were very useful. I compliment all of your teams on how they have adjusted to very difficult circumstances. Back to you, Chair.

CHAIR: Thank you very much, Senator Scarr. Mr Conroy, if you don't mind, I believe Senator Patrick had a follow-up question on COVID.

Senator PATRICK: Yes, thank you for your briefing in relation to the projects. Mr Fraser, obviously there would be some similarity in terms of disruption of supply chains between COVID and conflict. I'm actually very interested in the sustainment side of things because in a conflict you have an up tempo of operations and perhaps a worse situation in COVID. I don't want the answer now, but I just wonder: is Defence doing any analysis on that supply chain vulnerability from a sustainment perspective? Sort of a 'lessons learned from COVID'?

Mr Fraser : Yes, we analysed that right from the very start to map our supply chain vulnerabilities and actions needed for those. Importantly, most of our supplies—all of our supplies for combat operations—are from trusted suppliers of allies. The things that are more difficult, just in generalisation—I acknowledge we can take it on notice—are things like glues and all those really sub layer ones that are quite low down to subcontractors and other competitors. We've had to find ways around to work around some of those as stocks became reduced. But our combat preparedness was not diminished in the supply chain sense. I note the US and the UK have done an extensive amount of work as well on supply chain. We're mapping it. The committee might be aware of that other report on the supply chain from the House Armed Services Committee made in July.

Senator PATRICK: I didn't necessarily want a detailed answer. I just wondered if indeed there's a report being generated and an unclassified version of that that might be made available.

Mr Fraser : I'll take that on notice, Senator, if that suits you. We're working a whole-of-government issue here. It's not just a Defence matter; it's everything from Health and other. There is a Prime Minister and Cabinet led interdepartmental committee on supply chain and all of the work that we're doing associated with that. I will take that on notice to work out how best to satisfy your answer.

Senator PATRICK: Thank you very much. Thank you, Chair.

CHAIR: Questions from Mr Conroy?

Mr CONROY: Thank you to the ANAO and the various representatives from Defence for appearing today. I have some questions to Defence, starting on the Future Frigates program. Mr Fraser, thank you for appearing. Who's best placed to answer those questions?

Mr Dalton : That will be me.

Mr CONROY: Thank you. Mr Dalton, can you tell me what the current outturn cost of the Future Frigates program is as of today?

Mr Dalton : If you give me a few minutes I am sure I can. I'm prepared to talk about the 2019-20 MPR, but I can certainly go and get the current outturn figure. I just wouldn't want to quote it off the top of my head in case I get a decimal point wrong.

Mr CONROY: I appreciate it. If you can come back during the hearing, that will be great.

Mr Dalton : I can do that.

Mr CONROY: What's the current date for construction to commence on the first frigate?

Mr Dalton : We're kind of outside the 2019-20 MPR. The government has agreed to an 18-month delay to the commencement of construction of the first frigate—an up to 18-month delay. The original planned construction date was 22 December. That takes us to 24 June.

Mr CONROY: Mr Dalton, I point out that my questions are limited to subject matter within the MPR. I think it's entirely within the ambit of these hearings and consistent with past practice to ask for updates post where the MPR is on projects within the MPR.

Mr Dalton : Understood. I'll of course respond to any question you have, Mr Conroy.

Mr CONROY: I appreciate your flexibility, Mr Dalton—I really do.

Mr Dalton : I'm trying not to talk over you, Mr Conroy, but the current out-turned total cost estimate for the Hunter class frigate in 2201-22, the PBS out-turned price exchange, is $44.1 billion.

Mr CONROY: So no change from Defence estimates. With the up to 18-month delay, what's the current date for delivery of the first frigate, please?

Mr Dalton : We're looking at a window for the delivery of the first frigate, noting that we're not in contract. The current contract we have with the prime contractor, BAE Systems Maritime Australia, is for the design and production. The window for the first frigate delivery closes in December 2031.

Mr CONROY: I note the original delivery date talked about in Defence estimates was some time in 2029, so that's a two-year delay in delivery.

Mr Dalton : The original nominal delivery date was the end of 2029. That's the end of the window that we currently have with BAE Systems Australia, noting we're not on contract for the delivery of the first frigates yet.

Mr CONROY: Is IIC around December 2033 now?

Mr Dalton : That's probably a reasonable estimate.

Mr CONROY: Thank you, Mr Dalton. Has FOC moved as a consequence?

Mr Dalton : No. We plan to be back on the original nominal delivery schedule by the delivery of ship 4 in a nine-ship program.

Mr CONROY: So, ships 1, 2 and 3 will be delayed, but you're still expecting FOC in 2044?

Mr Dalton : We're still expecting the final ship to be delivered in the period around 2044; that's correct.

Mr CONROY: What is the current weight margin for the Hunter class?

Mr Dalton : Are we talking about the weight growth margin, Mr Conroy?

Mr CONROY: At Senate estimates, there was a discussion that there was a 270-tonne growth margin against the light ship weight of 8,200 tonnes. Is that still the case or has that moved?

Mr Dalton : That is still the case. The work we're doing with BAE Systems Maritime Australia is indicating that the actual achieved weight growth margin will be greater than 270 tonnes.

Mr CONROY: Those are all my questions on frigates, Mr Dalton. Are you best positioned to talk about the OPV?

Mr Dalton : I am indeed, Mr Conroy.

Mr CONROY: Excellent. Did the detailed design for the support systems occur in November 2020?

Mr Dalton : I think it's now scheduled for November 2021.

Mr CONROY: That's a further year's delay in what was in the MPR. The contracted date was March 2020, so we're looking at a delay now of a year and a half.

Mr Dalton : Just let me look at what's in the MPR. I think we are holding to the figure in the MPR. I will just confirm that, Mr Conroy.

Mr CONROY: It is page 206 if that makes it easier.

Mr Dalton : We are completing the platform one. Actually, the platform one had been completed and the support system one will complete this year. The latest I've heard, Mr Conroy—and, again, I am just trying to make sure that I am getting this right in my head, because there are a lot of programs in this MPR—is that we are expecting it to finish this week. If not this week, it will be next week.

Mr CONROY: So September 2021. You talked about possible delays to the early OPVs. What is the current planned date for delivery of OPV 1, Mr Dalton?

Mr Dalton : There is a delay to OPV 1 and OPV 2. We are currently looking at a delivery date for OPV 1—these are delivery dates, not launch dates—of June 2022 and we are expecting that the delivery date for OPV 2 will be in March 2023.

Mr CONROY: So is OPV 3 on track for May 2023?

Mr Dalton : OPV 3 is still on track. But, clearly, we are watching the workforce related issues in Western Australia for OPVs 3 and 4, the ships that are actually in production now, and OPV five, which will start production later on this year.

Mr CONROY: What is the revised IOC date for the OPV?

Mr Dalton : The IOC date has not changed, Mr Conroy. We did allow quite a bit of time from delivery to IOC in the original schedule. Navy is comfortable that we can still achieve IOC on the original schedule date.

Mr CONROY: And no change, presumably, to FMR and FOC then?

Mr Dalton : Not at this point.

Mr CONROY: I now want to turn to the Collins life of type extension. This is just a quick question. I note reports that Defence has committed $6 billion to this project. Is that the current price range for this extension?

Mr Dalton : Again, it's not a project that is in the current MPR, Mr Conroy. The government has considered first pass approval for the life of type extension of Collins. We haven't got to second pass yet. The budget is between $3.5 billion and $6 billion for the life of type extension.

Mr CONROY: I've got some questions about a couple of other projects that are in the MPR. Am I fine to go on with those, Chair? Is that okay?

CHAIR: I might just stop you there. Senator Patrick, do you have any related questions, or are you happy to cede to Mr Conroy for a while?

Senator PATRICK: I have a number of questions on those projects, and I think it would be too much of an interruption to Mr Conroy.

CHAIR: That's fine. Mr Conroy, please continue.

Mr CONROY: Thank you, Senator Patrick, for your generosity there. I want to go to the Boxer vehicle project.

Mr Fraser : Sorry, Mr Conroy; you were breaking up. Was that the Boxer armoured vehicle?

Mr CONROY: Yes, please, Mr Fraser.

Mr Fraser : General Coghlan will be able to assist you, Mr Conroy.

Mr CONROY: What's the current date for acceptance of the block 1 reconnaissance vehicles, General Coghlan?

Major Gen. Coghlan : We have taken delivery of all of the 25 block 1 CRVs on 31 May of this year.

Mr CONROY: So that was three months after schedule from the MPR and, in fact, seven months after the original plan?

Major Gen. Coghlan : The vehicle delays varied from months to weeks, primarily because of COVID in Europe.

Mr CONROY: Has initial material release been achieved, General Coghlan?

Major Gen. Coghlan : Yes, it has.

Mr CONROY: When did that occur?

Major Gen. Coghlan : I'll have to take that on notice and get back to you, Senator.

Mr CONROY: The major projects report noted a five-month delay to March 2021. Did it occur in that time frame?

Major Gen. Coghlan : No, it didn't. It would have occurred on or after the delivery of our last vehicles on 31 May.

Mr CONROY: Okay. So probably around June, but you'll take that on notice.

Major Gen. Coghlan : I will.

Mr CONROY: What is the current scheduled date for IOC then?

Major Gen. Coghlan : The schedule for IOC has not changed, June next year.

Mr CONROY: Is that the same for FMR and FOC?

Major Gen. Coghlan : FOC has not changed either. To answer your question on IMR, it was June this year.

Mr CONROY: And final material release hasn't changed either?

Major Gen. Coghlan : No, it has not.

Mr CONROY: Have there been any flow-on delays from the block 1 delays into block 2?

Major Gen. Coghlan : I'm sorry, Mr Conroy, you're garbled. Could you say that again?

Mr CONROY: Are there any delays in the block 2 production?

Major Gen. Coghlan : At this stage, we are not anticipating delays of block 2 production, but we are behind in the design. There are two reasons for this. Firstly, for physical reasons in that many of the suppliers and the factory in Europe have been closed for prolonged periods. Secondly, for non-physical reasons in that the design requirement requires multiple, over 100, engineers from around Europe ideally to be in one place at one time, and that has not been achieved. As a result, Rheinmetall are late with the DDR of phase 2. We are monitoring that intensely, and we hope to achieve that later this year.

Mr CONROY: What sort of time frame later this year do you mean?

Major Gen. Coghlan : November this year, at this stage, is what Rheinmetall has advised us. That will allow us to maintain our schedule overall for block 2 vehicles.

Mr CONROY: Was that November next year or November this year?

Major Gen. Coghlan : This year.

Mr CONROY: How big a delay design is that?

Major Gen. Coghlan : The design?


Major Gen. Coghlan : There are a number of variants. The primary variant is a several month delay on the design of the DDR process. There are also one or two other special variants where there are delays, recovery variant being the primary delay, where we will have at least a 12 month [inaudible].

Mr CONROY: Up to a 12 month delay in design. How can you be so confident that that won't impact on the actual delay in delivering the vehicles?

Major Gen. Coghlan : For example, the recovery vehicles are designed to be produced late in the production run. The production run goes for four to five years. At this stage, based on our block 1 experience, Rheinmetall is starting to build some components at risk. I cannot be entirely confident, but the DDR process is designed to reduce risk and increase our confidence to be able to deliver on time.

Mr CONROY: I've got some questions on C-27J Spartan and the MRH-90. Mr Fraser, which one is most convenient to turn to now?

Mr Fraser : If you'd like to do the C-27J, Mr Conroy, we'll start with Air Vice-Marshal Greg Hoffman. Then Mr Fairweather will answer questions on the MRH-90. Both will be supported by capability managers from Air Force and Army.

Mr CONROY: This is a $1.4 billion project that was to acquire a fleet of lift aircraft to fly into contested battlefields. It never achieved final operational capability for that role, and so the government has now redefined the airlifter as a humanitarian aircraft. Air Vice-Marshal Hoffmann, how did this project go so badly wrong?

Mr Fraser : Given its a capability one, I'll defer that—to start with at least—to Air Vice-Marshal Roberts and then come back to Air Vice-Marshal Hoffmann.

Air Vice-Marshal Roberts : Mr Conroy, to your question about battlefield airlift and the capability: government has redefined the role of the C-27J. It is a very versatile air mobility capability and has been critical in our engagement in the South-West Pacific and for humanitarian assistance and disaster relief. In terms of what occurred with the project itself: originally the aircraft was going to be bought as foreign military sales, and it was going to be a fleet of 1,000 aircraft operated by the United States Air Force. But the United States Air Force divested the program and ended their engagement in the C-27J. That meant fairly significant changes in terms of how the program was supported, going from a fleet of 1,000 with US Air Force support to a fleet that is now only 80 aircraft, of which we operate 10. We have to work now, without that US base for support, with Leonardo, the aircraft's original equipment manufacturer. That of course has significant implications on whether or not we can upgrade the aircraft and how quickly. It's a much smaller fleet with a much smaller base, and L3Harris are no longer involved in the design and development. It meant that the project had to change quite significantly when the US Air Force divested the fleet.

Mr CONROY: When did we make our final decision to invest in this project? Was it before the US divested or after?

Air Vice-Marshal Roberts : It was before the US divested.

Mr CONROY: So we made no active decisions around the acquisition of this project in terms of final second pass—or whatever the current nomenclature is—after the US divested from this project?

Air Vice-Marshal Roberts : The second pass was made before the US divested the project. It occurred after we had actually gone through the approval process.

Mr CONROY: Had we entered contract with the company?

Air Vice-Marshal Roberts : We were in contract with the United States Air Force for a foreign military sales purchase of the C-27J. We originally bought it under a foreign military sales construct, and that had to change, when the US divested it, into a commercial construct.

Mr CONROY: But were there opportunities to re-evaluate between those two contracts? Were we obliged to enter a contract with the commercial partner when the FMS fell through when the US divested?

Air Vice-Marshal Roberts : The FMS didn't fall through. The FMS case was actually enacted. We had signed a letter of offer and agreement with the United States Air Force to deliver us the 10 C-27Js. They fulfilled that obligation, but then, in terms of support, we couldn't get a support contract through foreign military sales because the US no longer operated that capability. So we had to enter into a commercial agreement for support and the follow-on design and development. The US did actually meet their obligation and deliver under the FMS contract, using L3Harris and Leonardo.

Mr CONROY: At last year's hearings, we heard there were deficiencies with the C-27J's electronic self-protection system. What are those deficiencies?

Air Vice-Marshal Roberts : The electronic warfare system itself is being retained on the C-27J. We would have liked, in the original concept, to have upgraded and changed the electronic warfare system. It does have a functional electronic warfare system on it; it's just not going to be upgraded to the levels that we need to continue to operate against high-end threats.

Mr CONROY: There were also deficiencies with the attitude direction indicator. Do those still exist and, if so, can you explain what that means?

Air Vice-Marshal Roberts : Mr Conroy, I'd have to get back to you on that. I'm not familiar with that particular deficiency. To my knowledge, it is definitely not a safety issue on the capability, but I'd have to get back to you on the details of that particular report.

Mr CONROY: Alright. Are there any other issues with the Spartan from Defence's point of view, in terms of the capability, other than the electronic warfare protection?

Air Vice-Marshal Roberts : For the role that the C-27J now performs, it is a very capable air mobility asset and has been critical in terms of everything from COVID support in Papua New Guinea through to the Operation Bushfire Assist in the past. Also, for the humanitarian disaster relief activity roles that it now performs and through engagement with the South Pacific, it is an extremely capable air mobility asset.

Mr CONROY: When was the decision taken to redefine the role of the aircraft?

Air Vice-Marshal Roberts : In December 2020 the decision was made by government.

Mr CONROY: That was a cabinet decision?

Air Vice-Marshal Roberts : That was an NSC decision, yes.

Mr CONROY: I note that, around the same time, the minister made an announcement of the acquisition of Chinook helicopters. Is that as a direct result of the failure of the C-27J project to fulfil its function as a battlefield airlift aircraft?

Air Vice-Marshal Roberts : I'd defer to Mr Fairweather or Mr Fraser to answer that question. It was not directly related to the decision on the C-27J. The C-27J decision itself was made in terms of the role of that particular capability and what it would perform. I would stress that it can still operate in high-threat environments, just at an increased level of risk. It has the ability to function, but we would have to make operational decisions as to whether we put it into those high-threat environments with different mitigations.

Mr CONROY: The government has made an official decision to redefine its role—

Air Vice-Marshal Roberts : Yes.

Mr CONROY: The government can make another decision to risk personnel by sending it into battlefields, but there is a capability gap. My question is: was the additional acquisition of Chinooks a decision to bridge that specific gap?

Air Vice-Marshal Roberts : I'd defer to Mr Fraser and Mr Fairweather to answer that particular question as they did the approvals for the Chinook helicopters. That is not one of my programs; it's not an Air Force program.

Mr Fraser : I'll ask Major General Stuart to assist us on the aircraft. Army has a requirement for additional Chinooks. It always has. We had an opportunity to buy a couple of additional Chinooks, noting the workload that they carry and have always carried and we expect them to carry in the future. Simon, could you assist Mr Conroy, please?

Major Gen. Stuart : The fleet [inaudible] CH-47 [inaudible] aircraft was always considered to be [inaudible] based on some analysis and modelling. The determining factor in the fleet size was funding. That platform has been an excellent performer in terms of cost [inaudible] the rate of effort and reliability. As I think we're going to talk about soon, the MRH has underperformed and part of the risk mitigation was to bring the size of that fleet up to the recommended size of 12 aircraft. The modelling and study that was done [inaudible] about optimal fleet size, based on the mix of aircraft that we have in Army aviation, showed it was between 13 and 18. So the additional four in the last financial year brings us up to 14. So it is fair to say that it is part of the risk mitigation for the underperformance of MRH but, in its own right, is excellent value for money, reliability and, as you've seen, it is performing very well both domestically and overseas and it is a combat aircraft.

Mr CONROY: I've got two more questions about the Spartan and then I will come back to MRH-90 after other people have had a go, because the chair has been generous with the time. Firstly, we have got a decision by government to redefine the role of the Spartan because—to paraphrase Air Vice-Marshal Roberts—to use that aircraft on a battlefield would require government to make a decision about the threat to personnel who use it. So we currently have a capability gap in that that is a battlefield airlift aircraft that we can't use at the current risk levels to troops. So if government doesn't make a decision that it's comfortable with an increased risk to defence personnel, what capability can fill that gap? Do you understand what I'm asking, Air Vice-Marshal Roberts?

Air Vice-Marshal Roberts : I do. It's a bit of a combination here between me and Major General Simon Stuart in that battlefield airlift actually sits under the Army program. But, in that context, I would say that, from an aviation perspective in general, we believe that we don't have a capability gap even though the C-27J has been re-rolled. We believe that there is sufficient capability to be able to achieve the roles. We still have the C-130J, the C-17, which is a major airlift platform, and we do also, as you've quite rightly pointed out, have the Chinook helicopters and other helicopters in the Army program that are available for battlefield airlift. So that assessment has been done, and we do not believe that there is a capability gap at present in terms of battlefield airlift in general. I'd defer also to Simon, if he has any particular comments on that.

Major Gen. Stuart : I would just reinforce Air Vice-Marshal Roberts' comments there. The capability requirements are met by a combination of the CH-47 and the C-130J, in the main—the CH-47 [inaudible] lift, for theatre, given its range and payload profile and C-130J for theatre but also in intra-theatre. So we are comfortable that the range of operational tasks are covered by those two platforms in particular.

Mr CONROY: Some of the logical questions that have come out of the evidence from both Major General Stuart and Air Vice-Marshal Roberts include: why have taxpayers spent $1.4 billion on a project that you've both provided evidence can be filled by other capabilities? Why are we wasting $1.4 billion if the capability can always be filled by the Hercules and the Chinook?

Air Vice-Marshal Roberts : The C-27J always had a role in humanitarian assistance and disaster relief and it still fulfils that air mobility role very effectively. It has been clearly demonstrated in recent times, in terms of the operations that it's been used in in supporting the COVID task force, in supporting bushfire assist operations and supporting crises in our region, that the C-27J provides critical air mobility lift capability. So it still fulfils that role, which is extremely important, and that investment made by government is going to be effectively used to fulfil that air mobility role. It is an aircraft that can get into a lot more airfields than the C-130J. In that context and the loads that it can carry, it's an extremely effective air mobility aircraft. It performs as part of our air mobility fleet, and that is what we have invested in to achieve those key roles that we need to get people and supplies throughout Australia and throughout our region of interest in the south-west Pacific.

Mr CONROY: Is it reasonable to say that, if we originally intended to get an aircraft that wasn't needed to go into battlefields but filled those other, humanitarian relief roles—you've just talked about how useful they are—it would probably be cheaper because it wouldn't require such a high level of capabilities around threat detection, threat evasion and all of those things that go with going into a highly contested battlefield?

Air Vice-Marshal Roberts : I really couldn't answer that question off the top of my head. There are very few aircraft in this particular category, though. The advantage of the C-27J is that the ramp is very similar—it's got the back-opening ramp so that you can get the supplies in and drop them out with parachutes et cetera. And it has the same load [inaudible] commonality, so I can't really speculate as to whether or not there would have been something that could have done all those roles with the level of commonality that we've got with the C-130J but at a different price. The actual air mobility roles, particularly the aerial drop capabilities, are something that's really not available except with military type aircraft, so I would have to go and do a very detailed analysis to determine whether there had been something else that was available at the time, but, certainly, there are not many aircraft in this particular category with the level of commonality with the C-130J.

Senator PATRICK: I just want to go to some answers on the Spartan. I might go to the Auditor-General. Dr Ioannou, you'll be aware of the Auditor-General's August 2013 report into Air 8000. In that report it makes it very clear that there was a combined pass approval in May 2012, but it's also very clear that the US had ceased orders of the Spartan and announced that they were divesting themselves of the Spartan in February of that year. Is that not correct?

Dr Ioannou : Yes. We did that audit, from memory, at the request of Senator Johnston, the minister at the time.

Senator PATRICK: That's correct.

Dr Ioannou : I was just having a quick look at paragraph 1.14 of the audit. In fact, I think the US was making announcements about cancellation and divestment around January 2012.

Senator PATRICK: Exactly, so I'm troubled by the evidence provided to us by Defence in response to Mr Conroy's question. We've just heard an explanation that this program was so troubled because we bought into it under FMS and then it was divested, but we knew about the divestment. There was huge controversy around this project around the time of the purchase. In fact, Senator Johnston, Liberal shadow defence minister at the time, raised considerable concerns. The report is quite scathing. It's beyond my comprehension that Defence is now undertaking some sort of rewrite of history in relation to this. I don't know if anyone wants to respond to that, but the evidence just provided to Mr Conroy is wrong.

Dr Ioannou : I'll just add, as a factual matter, that, in paragraph 27 of that audit, we did observe that the FMS contract was entered into on 4 May 2012, so that was certainly subsequent to US announcements around divestment.

Senator PATRICK: That's contained in footnote 5 of your audit. It says:

5. In January 2012 the US cancelled future orders of the C-27J and announced plans to divest the aircraft.

Dr Ioannou : I'll just add this, though. If you read the audit [inaudible], there was level of uncertainty at the time. Paragraph 1.14 did say that there was ongoing debate in the US around what was going on. So there was a little bit of fog around, if I can put it that way, but certainly the principal dates are clear enough.

Air Vice-Marshal Roberts : Senator Patrick, my apologies. The evidence I gave before was incorrect, and I have clarified that. My understanding is, as per the report, the US had announced intent to divest in February 2012 and the FMS contract was signed in May. In that context, as the Auditor-General indicated, there wasn't full clarity as to how far the US would be able to support. We were still, at that stage, of the understanding that they would fulfil their FMS obligations for the C-27J.

Senator PATRICK: I will leave it there and let Mr Conroy come back to that. I wasn't going to go to that. I know about this because I was assisting Senator Johnston at the time and there was huge controversy around it. I might just go to the Auditor-General and ask a question. If I take you to page 160 of the audit report, it says in relation to the Future Submarines:

Under the Submarine Design Contract, the Functional Ship Systems Requirements Review was scheduled for 31 Oct 19 and experienced a delay of five weeks to conduct of the review.

You might recall that we had discussions about this. In May last year we were talking about whether or not the time point was the entry point or the exit point for the review. It was established very clearly it was the exit point, but in May of 2020 we were well aware that that statement was incorrect. It was correct at the time when Defence were reporting, but for the mistake about the entry and exit. How do we get to a report that is released in November 2020 with information that is clearly wrong? I note, Auditor, you state in the audit report that you are absolutely satisfied that these PDSs that are provided by Defence are accurate. It's a clear mistake.

Dr Ioannou : Sorry, Senator, I think I lost your train of reasoning there. Could you just step through it again?

Senator PATRICK: You will see on page 160, where you're talking about the submarine schedule—this is Defence supplied information—it talks about a milestone that was scheduled for October 2019 and goes on to state that it experienced five weeks of delay. In actual fact, that milestone was never completed until about June. In May of 2020 we had a discussion about this and it was clearly established that that was wrong, yet five or six months later you released a report that allows that to go through as a statement of fact. It's just wrong.

Dr Ioannou : Sorry, I think we'll have to take that on notice. I think you're asking us to do a reconciliation against—

Senator PATRICK: Well—

Dr Ioannou : And of course there was a question on notice that I think you sent to us on some of these matters, where we went to Defence and consulted with them, and I think we responded. We'll just have to do a reconciliation on some of that.

Senator PATRICK: My concern here is that it's absolutely wrong. That milestone did not hit until, I think, closure in June of 2020. But in May of 2020 we had a detailed discussion. I remember asking Mr Sammut: was it entry point or exit point? The Auditor-General was very firm and in fact correct that it was the exit point and it had not been achieved. Yet the report as it stands has a factual error that somehow has slipped through.

Mr Fraser : Clearly, we provide that information [inaudible] to work your way through it.

Senator PATRICK: Sure, and I note that the secretary signed off on these in November 2020. I'd also maybe just jump to where the Future Frigate program talks about uniqueness. There are a lot of high-level words in Defence's statement about that. There's a whole bunch of information that's in the public domain about uniqueness that goes to things like the combat system, the CEAFAR radar, the Aegis system and the displacement of the vessel. It seems to me that this sort of detail should be in the uniqueness, to spell out exactly what the uniqueness is between the type 26 UK variant and the Australian variant. It seems deficient.

Mr Fraser : As we are working up this current report I'll ensure our team is aware of your [inaudible].

Senator PATRICK: But it also goes to the auditor inspecting these. Para 24 of the audit says:

The Auditor-General has concluded in the Independent Assurance Report for 2019-20 that 'nothing has come to my attention that causes me to believe that the information in the 25 Project Data Summary Sheets in Part 3 …

et cetera and that there isn't anything untoward in there. It just worries me when I see stuff that is either deficient or furtively wrong and it appears in an audit.

Dr Ioannou : Ms Page may want to jump in on some of the detail after me if she thinks I haven't covered it. Remember that both the Future Submarine PDSS and the Future Frigate PDSS are somewhat different, as they appear in the MPR. Those projects, certainly the submarine, haven't gone through the regular approval processes but we've included them, at the request of the committee, for a degree of transparency. They're not as completely worked up, I suppose is the best way to say it, as some of the other PDSSs, given the stage of the projects. I don't know if Ms Page wants to add anything more to that.

It's not entirely accurate to describe this as an audit. It is a limited assurance review and based on representations from the department, and we review it on the basis of whether anything is coming to our attention around material misstatements. It's not the kind of reasonable assurance review that a regular performance audit calls for.

Senator PATRICK: That might go to its comprehensiveness but I suggest it shouldn't go to its accuracy.

Dr Ioannou : Sure.

Senator PATRICK: I'll move on.

Mr Hehir : Could I ask a question on that last point? On the area of uniqueness, did your comment relate to the accuracy of the information in that section or the comprehensiveness of it? I thought I heard you say that you believed there was additional information that could have been included.

Senator PATRICK: In the first instance, relating to the submarine, I think it is absolutely inaccurate.

Mr Hehir : I was thinking about the Future Submarines, yes.

Senator PATRICK: With the second point, I'm just saying I think there could be clarity in the PDSSs, because there's certainly a lot of information about uniqueness that wasn't captured in that summary. I understand you don't write that; nonetheless, you're ultimately responsible for accepting these things.

Mr Hehir : Yes, but my question goes to whether what's in there is—are you saying it's misleading or not as comprehensive as you would like?

Senator PATRICK: In that instance, I'm not saying that section is misleading; I'm just saying it perhaps lacks detail.

Mr Hehir : Your comment goes to whether we should work with Defence to include more narrative in that [inaudible]—

Senator PATRICK: Sure.

Mr Hehir : whether the audit report with respect to this is sufficient, because you're not saying there's something inaccurate in that section.

Senator PATRICK: No, I'm not saying that.

Ms Page : Senator Patrick, you mentioned type 26. Were your comments in relation to uniqueness for the future frigate as well?

Senator PATRICK: That's correct.

Ms Page : Right.

Senator PATRICK: There's a lot of detail in the public domain here in Australia about what is different between the type 26 and the future frigate that is not contained in that section.

Mr Dalton : Senator, if I can, I'll try to put your mind at ease on that particular point. I think, as the Auditor-General and Dr Ioannou have said, this is the first time that the Hunter class program and the attack class program have appeared in the MPR. They are a little bit different from the other major projects inasmuch as both are in the design phase, so there is no contract for material delivery yet. While both have been through second pass, if we were to quote the contracts that we have, they would be, from a major projects view, probably more akin to first-to-second pass. When we get into the contract for the delivery of the first ships and submarines, then they'll start to look and fit more into the framework that suits the Major projects report. I do take your point in the discussion around uniqueness, Senator, and we will update that in time for the next MPR. It could be more whole-of-program specific, rather than just the design phase. So we will absolutely take that on board and look at that for the next report.

Senator PATRICK: Alright. I might just stay with you in relation to your comments to Mr Conroy about the delay in the Future Frigate program—the first ship delivery shifting by two years, but the expectation that you'll recover by ship 4. You will recall I have asked both you and the Auditor-General this question: when has a defence project that has been behind schedule, a major defence project, recovered schedule? I'm yet to receive an answer to that question. Maybe you've answered it and I'm not aware of it.

Mr Dalton : I thought we had answered that. If we look at this particular MPR, and it's in the Audit Office's analysis of it, there has been clearly a discussion going on between us and the Audit Office about the description of 'delay'. I'm just trying to find the right page. This actual report does talk about the amount of schedule that was lost over the period, but it also for the first time talks about schedule recovery. On page 62 of the report, it says:

In total … seven projects have contributed 36 months of schedule recovery to the Major Projects.

So in the ANAO's analysis we are getting more of a fine-tune. There has been schedule delay, but the ANAO are now reporting, in this particular report, the projects that are actually recovering schedule, and it does talk about seven projects that have contributed 36 months of schedule recovery over the period. That's on page 62.

Senator PATRICK: Thank you for pointing that out. I might have a look at that and we'll come back to that at the next hearing. I just want to go over a couple of dates that you talked about with Mr Conroy. Obviously, we've shifted the build, or the first cut, of the future frigate out to March 2023. Now, originally there was a program in place, the prototyping of the hull, that was designed to carry over the workforce from the OPVs to the Future Frigate program. You said, I think, that the future frigate build commences in June 2024, but you also said that the second OPV will finish in March 2023. Clearly there's a big gap there for the welders, for the hull-type workforce in Adelaide. What's the government doing in relation—[inaudible]

Mr Dalton : I think the bit that's missing in that conversation is prototyping. BAE Systems Maritime Australia commenced prototyping in December last year—which, I might add, is on schedule. So they're already taking people coming off the Arafura-class offshore patrol vessel program into the prototyping as those trades move around between completing the build of those two ships.

Senator PATRICK: That was hull-type prototyping, wasn't it?

Mr Dalton : We're building blocks. As we move through the prototyping phase—and that phase will be extended slightly—those blocks will become more complex, and the fit-out of those blocks will become more complete. That will absolutely pick up those trades.

Senator PATRICK: Clearly there is a cost implication for the project in extending the prototyping activity to now fill that gap between the second OPV and the new construction date. Can you provide the committee with the cost associated with that extension of work, please, on notice?

Mr Dalton : We're not actually anticipating too much of a cost variation, because the blocks that we're building in the extended prototyping period will probably move towards ship 1, or certainly batch 1. We'll certainly take that on notice, but I will just flag at this point—

Senator PATRICK: You can't just keep a workforce employed without additional cost. There's going to be additional steel, additional resources, involved in that activity. So I don't accept it's nil cost.

Mr Dalton : But not if those additional blocks are then moving into the batch 1 build program. The overall length of the program, for nine ships, has not changed.

Senator PATRICK: That means you're basically, in some sense, blurring the line between the prototype and the initial build, which was scheduled for 24 June. The chair is wrapping me up here, so maybe on notice you could just provide some information that explains what's involved with that gap and what it actually means shifting from prototyping to some component that can actually be used on the ship. If you could do that on notice, I would be grateful.

Mr Dalton : We'll take that on notice, but I would add that there was always going to be an overlap between prototyping and the commencement of the first batch.

CHAIR: There was a report in 2018-19 which looked at Defence's management of projects of concern and looked at Defence's demonstration of the effectiveness of its processes to manage underperforming projects. I note you recently responded to the recommendations from this report. I have a question, firstly, to a representative from the Department of Defence. Could you please outline what changes have been made to your assurance mechanisms for projects of concern and what impact you anticipate these changes having?

Mr Fraser : I'll start and then I might seek some support. It is important to get the project right in the first place, and the work that we do with that. I was asked a question by Senator Scarr earlier on around independent assurance reviews and the work that we were doing. We've increased that. It's an important part of the program. We've gone from doing 125 independent assurance reviews in 2019-20 to doing 143 independent assurance reviews in the year just gone, 2020-21.

We are working to improve the way in which we're able to measure the underperforming projects. Invariably, it's data driven quite easily on cost and schedule against the documented milestones and loaded milestones and then the capability a little more to that. As we develop up the program report or the project and sustainment report that we're doing to supplement the sequencing in between portfolio budget statements, portfolio additional estimates statements and from this major projects report itself, we will continue to mature that by feeding in capability manager assessments and information. That's important because, ultimately, they are the first principles responsible for the capability delivery and we are the delivery agency but the operational effect is through the capability manager.

We will continue to improve, and the expectation is to develop up a live dashboard of projects that we're able to manage and see quicker and easier so that we can elevate the issues that arise during those projects and take management action accordingly. It is a balance between authorising the smaller projects to make sure they work with industry to develop the capability, with a balance of oversight and guidance with them. I would note that we've had a significant increase in the complexity of our projects, as I put into that opening submission, where the category 1, the highest level, [inaudible] from 11 to 21 and about a 50 per cent increase in the next level down. So both industry and ourselves are competing for project managers, schedulers and cost assurors and all of those things together. I will pause there.

CHAIR: I have a question for our representative from the Australian National Audit Office. Does the ANAO believe that these changes will broadly address or have broadly addressed the concerns raised in the previous report?

Dr Ioannou : There are a couple of angles on this. We recently published a performance audit report on Defence's implementation of both the parliamentary committee recommendations and the ANAO recommendations. One series of audit report recommendations that was reviewed in the context of that more recent audit report went to our audit of projects of concern. We basically found that in respect of the two recommendations that we made in the audit that we judged they had not been implemented by the department. We believed that both recommendations had been agreed by the department and that plans had been made around implementation. They really went to some fundamentals around the projects of concern issue, including the introduction of some formal policy and procedures around the process. Another recommendation related to the evaluation of the projects of concern regime. So I would just note that our assessment to date has been that neither recommendation has been implemented.

CHAIR: I am conscious that the time has just about completed. I just wanted to ask a quick question in relation to the MPR format. There was some comment during the public hearings for the review for the MPR last year around the major projects report format and whether processes need today be reviewed, with a view to making any key changes. My question, first to a representative from the Department of Defence, is: do you believe that any review is needed and—also to Defence and to the Australian National Audit Office—if so, whether there has been any discussion of a possible review of the MPR process.

Mr Fraser : We are working cooperatively with the Australian National Audit Office. There have some difficulty during COVID and doing it remotely, but the feedback that I've got from my team is that we are both working together to produce the most clear and accurate report that we can, noting the recommendations on plain language and other things that the committee had previously reported on. I'll defer to ANAO about the format from the front end, because it's not appropriate for me to comment on that.

I think we've made points previously around schedule and the way in which a schedule is portrayed, particularly the finance one where it was including not just the cost of the project and there was a real cost increase for one project but for others where there's indexation and scope adjustments to scope approvals that have been approved by government. I'll pause there, Chair, thank you.

Dr Ioannou : I would add to those comments in the sense that I think both the defence teams working on the MPR and our own MPR team have been trying to work as collaboratively as possible to try to keep the project on the rails, in an environment where things like visits to projects et cetera have not been possible. So that's been a real positive. In terms of the look and feel of the MPR, going forward, we're very conscious that we responded to the JCPOA's recommendations a little while back and we're working hard to try to implement those recommendations. Ms Page can go to some of the detail, if there's time. We tried to introduce as much as we could in the MPR that's before us, but you'll see the fruits of that more in the next iteration of the MPR.

CHAIR: Thank you for appearing today, to all witnesses. I note that we're running out of time for this public hearing but I do thank you all for appearing. If you have taken questions on notice or have been asked to provide additional information could you please forward it through to the secretariat by Friday 1 October 2021. I also advise that if the committee does have further questions they will be sent through to you, in writing, through the secretariat. I thank all members of the committee and the secretariat for their time today as well. I now declare this public hearing closed.

Committee adjourned at 10:32