Budget ‘prioritisation’ in axing of satellite plan, officials say

The Australian Defence Force may end up buying satellite time from partners or commercial vendors following the axing of a $7bn space project, officials say.

Lockheed Martin was to have delivered the now-axed $7bn satellite project. Picture: Lockheed Martin

The Australian Defence Force may no longer get a sovereign-owned satellite network following the axing of a planned $7bn system, and could instead have to rely on purchasing bandwidth from partners or commercial vendors, officials have revealed.

A Senate committee heard $90m of taxpayers’ money had been wasted on the project, known as JP9102, which was to have been delivered by US defence giant Lockheed Martin until it was stripped of the project on Monday.

Defence officials claimed the money for the project was still sitting in its $330bn investment program, but conceded there had been a budget “prioritisation” issue linked to the decision.

They said the move to pursue a multi-orbit system rather than the originally planned network of geostationary satellites was made by Defence Minister Richard Marles last week following departmental advice on technological changes and emerging threats.

Chief of Joint Capabilities Susan Coyle said the department would work with partners and vendors next year to provide advice on an “accelerated” pathway to deliver the alternative capability to the ADF by the early 2030s “if not sooner”.

Vice Chief of the Defence Force Robert Chipman said the project – which would have been the nation’s biggest space investment – was originally envisaged as a “sovereign owned and operated” system, but that might no longer be what the ADF would get. Under the revised plan, he said, the ADF could “potentially” pay for guaranteed access to a satellite system operated by an ally or commercial vendor.

“We are yet to go through the process of understanding what future options might look like, but it will be assured satellite services for the Australian Defence Force,” Air Marshal Chipman told the Senate estimates hearing.

Vice Chief of the Defence Force Robert Chipman with Defence Minister Richard Marles. Picture: Getty Images

Defence officials said Lockheed Martin Australia was not officially told it had lost the project until a Monday morning meeting with chief executive Warren McDonald, after The Australian had already reported the project would be cancelled.

Deputy secretary Chris Deeble told the Senate’s Foreign Affairs and Defence Committee he “did not get down into the specifics of the budgetary issues” linked to Defence’s investment program, “other than the fact that this was a prioritisation done within that context”.

“We talked about the range of issues that are associated with the National Defence Strategy and the prioritisation that was key to that,” he said.

Mr Marles said on Tuesday the ADF needed a “more resilient” system than the one that was originally planned because of new technology “which enables satellites to literally be shot out of the sky”.