|Mark Dodd | September 03, 2008
THE axe is poised to fall on another troubled defence project, the $150 million contract to buy unmanned aerial vehicles for the Australian Defence Force.
It is understood the Defence Materiel Organisation has recommended to Defence Minister Joel Fitzgibbon that the problem-plagued contract be axed. A formal announcement by Mr Fitzgibbon is expected later this week.
The Israeli-built I-View 250 UAV system is dogged with technical problems and more than two years behind schedule. The relationship between the partners in the project, US aircraft builder Boeing and Israeli Aerospace Industries, has deteriorated in recent months.
A defence source close to the project, who asked not to be named, said: "The capability has not been axed but the contract has. Boeing have had two years to get this sorted and they've been dragging the chain."
Taxpayers can expect a refund from Boeing of about $6 million. Boeing did not reply to a request for comment on the project.
Following the axing of the $1.2billion Seasprite project in March, Mr Fitzgibbon drew up a list of four "projects of concern" to name and shame delayed defence procurements, including the UAV project.
In December 2006, Howard government defence minister Robert Hill signed a contract to purchase eight of the UAVs because "it offered the best value for money".
The UAV is designed to provide the army with airborne surveillance, target acquisition and reconnaissance capabilities for ground operations.