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Principal Systems

What did they spend our money on?


This page examines the principal existing systems of the NZDF. These are examined in order of depreciated value.
A useful, if defensive and somewhat self-serving, background paper on Ministry of Defence management of acquisition projects is the Major Projects Report 2010. This should be compared with earlier Audit Office reports
 

P-3K2 Orions


P-3K2

$352 million

Navigation and communications systems refurbishment completion 2014

from Wikipedia

Lockheed-Martin P-3 Orion 

Engines: Four T56-A-10 Allison turbo prop
Maximum fuel weight: 28.7 T
Fuel burn rate: 1.8T/hr
Maximum speed 411 kts
Cruise speed: 328 knots
Loiter speed: 203 knots
Take-off run: 1297m
Ferry range: 4.830 nM
Maximum endurance (internal fuel) 16 hours
Maximum endurance (external fuel) 21 hours (RNZAF World record)
Crew 11

sources: Lockheed-Martin and FAS

 
"The P-3K2 is more than just a refurbishment of the P-3K aircraft. It will brings a completely modernised capability that requires the support of not only the RNZAF, but also the wider NZDF and several New Zealand government agencies. As the P-3K2 with its new capabilities rapidly approaches full release to service, these agencies are taking a coordinated approach to ensure it can deliver the capability for which it was designed; for defence, support to Government agencies and New Zealand’s contribution to the security of the wider global community" - RNZAF project site
 
Operating Costs
The 2011 Defence budget appropriation was $165m but this will increase to $176 million with the upgrade of the aircraft from the P-3K to the P-3K2. Three aircraft fly a total of 2137 flying hours which brings the operational cost to $77,000 per hour. While this is higher than the Hercules (which uses similar engines) one cannot overlook the huge overhead costs of the crew and the electronics on the P-3K2 which makes it so expensive.
 
Comparative Purchase
The P3 is an ancient platform but with a uniquely attractive combination of long range, low loiter speeds and high capacity suitable for anti-submarine warfare. The P-3's list of customers is extremely long due to its excellent performance, however the machines are now being replaced by newer technology. The United Arab Emirates purchased and adapted two Bombardier Dash-8 Q300 civilian turboprop airliners into maritime patrol aircraft in 2009 for US$290m.  However the Q300 has nothing like the range or resilience of the P-3.  In a similar vein ( but with a great deal more dodginess) the Turkish navy has bought 10 ATR-72s for maritime surveillance for $219 million. Once again the ATR has nothing like the range of the Orion. The $80 million for sensors suggests the Turks will be mostly looking out the window for targets too.
 
Australian Example: The Australians use AP-3Cs (P-3s), however they are replacing these with the P-8 Poesidon aircraft from Boeing from 2017/18. These were intended to be augmented with unmanned aerial vehicles like the MQ-4C Triton (see Australian Defence Material Organisation) at a total cost of around A$6 billion. However BusinessWeek has reported the Australians are getting cold feet over the UAVs and may buy more P-8s instead. One thing is for sure by 2020 New Zealand's P-3s will look a bit shabby next to the P-8s.
 
Latest Technology
The Boeing P-8 is another typically expensive US development (based on the B737 airliner) which will steadily replace the P-3.  Of interest is the Japanese Kawasaki Heavy Industies P-1, a purpose built aircraft which cost the Japanese less to develop than buy from the Americans. The Europeans have got into the act the Airbus A319 MPA which is also very expensive but has less credibility than the other two because nobody has seen one yet. Of interest however was the Embraer P-99 which was a modification of a business jet boasting flight hour costs a fraction of the airliner based MPAs. The Embraer is too small to match the ranges of the P-3 but the conversion of business jets to maritime surveillance led Dassault to offer its Dassault 900 business jet as an MPA which does meet New Zealand's needs.
Another important trend is the move towards unpiloted aerial vehicles. The RQ-4 Global Hawk , the MQ-9 Reaper and General Atomics Avenger are all very cheap, very capable platforms for scanning huge amounts of empty sea looking for needles in haystacks. IF, that is, you operate a network of satellites over the entire Earth. The problem with UAVs is the connection between the base station and the aircraft. While aircraft can take excursions by themselves out of radio range reporting anything interesting back to their operators rather depends on being able to contact them. The RQ-170 incident where the Iranians hacked a super high technology spy drone  shows how vulnerable drones are to electronic counter measures (ECM).
Treasury has suggested that the Orions could be replaced by Earth Observation Satellites. These satellites orbit at about 400km and have a radar resolution of about 1m which is good enough to detect wreckage or a small aluminium boat. But having detected a target the question of whether it needs rescuing or other forms of attention still remains, hence the need for aircraft.
 
Comment
The P-3K2s are extremely useful platforms although the old Lockheed Electra body is rapidly approaching its used-by date.  While the P-3K2 are still flying some form of replacement will be needed within the scope of this assessment period.
 
 
 

1999-2001 ANZAC Class Frigates

For a complete background on the design visit: http://en.wikipedia.org/wiki/Anzac_class_frigate

Te Kaha

Te Mana

$1,194 million

estimated life 25 years until obsolescence



from Wikipedia (Navy moved theirs)
Design Blohm & Voss (German) Meko-200
Manufacture Amecon
Standard Displacement:   3,600 tonnes

Length Overall:               118 metres
Beam:                            14.8 metres
Draught:                         6.2 metres
Speed:                           27+ knots
Range:                           6,000 nautical miles at 18 knots (13.8 days endurance)
Complement:                  177 Officers and ratings 
5 inch (127mm L54) fully automatic lightweight gun
Eight cell Vertical Launch System which houses the NATO Seasparrow Mk 41 air defence missile
PHALANX Close In Weapon System
Two MK 32 Mod 5 Surface Vessel Torpedo Tubes
DATA source RNZN

Availability
Te Kaha: 160 sea days (2011)*
Te Mana : 110 sea days (2011 undergoing upgrade)

Operating Costs
The 2011 Vote Defence Budget appropriation was $408 million in annual operating costs including depreciation and capital charge. This comes to $1.5m per operating sea day or $3,472 per nautical mile (at 18 knots).

Comparative Purchases: The Republic of South Africa bought four MEKO-200 class frigates in 1999 in a deal worth US$1.12 billion (offsets $335m) for delivery by 2007; Greece purchased 3 MEKO-200 for US$1.2 billion (offsets US$250 million) in 1988;source Stockholm International Peace Research Institute.

Australian Example: The Australian ANZAC frigates are largely the same as ours. The main difference is they work with the Australian fleet which includes submarines and landing platform dock ships.

Latest technology
The German F-125 frigate is interesting for its availability. The ship operates for 5000 hours a year (208 days) and requires two crews which are swapped by air. This is a development from the oil industry where capital is kept operating even when crews are rotated for shore leave. Another interesting ship is the Singaporean Formidible class frigate. This is a 3,200 tonne ship with a crew of 70, around 40% of the ANZAC class.
Comment
In battle in South East Asia the ANZAC frigates have little to fear in open ocean from the TNI Navy. They would have to be nervous if they were fighting their Singaporese equivalents which are better in almost every degree. However where frigates would have to worry is fighting in an archipelago where attacks from speedboats with ASMs and land based artillery could prove very unhealthy very quickly. A fight with an aircraft could also prove very short given the latest generation of Russian ASMs.
Realistically however a combat platform is an unnecessary requirement. These vessels are over-expensive helicopter carriers and fisheries/piracy patrol platforms. An OPV (Offshore Patrol Vessel) can accomplish the same task for a fraction (20%) of the price of a naval combat ship. 

New Zealand Light Armoured Vehicle (NZLAV) Third generation

For a complete background on the machine visit http://en.wikipedia.org/wiki/MOWAG_Piranha
For the complete Audit Office report

 $750 million
 for 105 vehicles
~US$3m each

in 2003

life-time (IRD) 15 years

expected 20 years
 
from Wikipedia
 Design: Mowag (Swiss)
 Construction: General Motors (Canada)

 Combat weight: 19.85 tonnes
 Height: 2.88m
 Width: 2.83m
 Max speed: 109km/h
 Slope:  60% frontal and 30% side grade
 Trench: 2m
 Fuel: 200 litres diesel (450km max range on paved roads)
 Armament: Bushmaster 25mm autocannon + coaxial and commander  7.62mm MG
 Armour: STANAG 4563 level III (all around protection against 7.62x51mm)
 Protection:  NBC and fire suppression
 Crew: 3
 Capacity: 7 infantry or three tonnes of cargo
DATA NZ Army



Operating Costs:  The land force has an appropriation of $211 million per year but this is rather more than just operating LAVs. In 2004 three US Government Accountability Office estimated  the operating costs of the Stryker (a similar model) at US$18.78 per mile. But a more accurate calculation by The Defence University returned a value of US$13.3 per mile (NZ$10.79/km) in a US operational brigade setting (Iraq). Note this includes repair costs, parts inventories etc etc. Using the latter figure a troop of four vehicles would cost $45/km or $20,250 over 450km.

Comparative purchasesRepublic of Ireland bought 40 Pihrana III ( the Swiss made version) for 51m Euros in 2003 (average price 1.27m Euros) source: Irish Department of Defence. The Malaysians spent $559 million on 257 Turkish FNSS Pars 8x8 vehicles in 2011 (average price US$2.2m). This vehicle will be redesigned to Malaysian specifications and is amphibious with capacity for ten plus three crew compared to the NZLAVs three plus seven. In August 2010 the Swedish Army placed an order for 113 much more capable Patria AMV for an average price of US$3.16 million per unit. Global Security states the Marines LAV-25 (which is very similar in specification to the NZLAV except it has lighter armour and is amphibious) is US$900,000. while the Stryker is around US$2.8 million (2004). What is apparent is the NZ Army paid through the nose for this vehicle.

Australian Example: Australia operates the older first generation Mowag I or ASLAV with a sticker price of US$2.2 million and a re-built M113 tracked APC. These are both notably older than the NZLAV.

Latest Technology: The latest technology in the wheeled metal box space is trending towards modular vehicles. That is the hull and drive components remain static but the mission compartment can be swapped. This is the concept behind the Patria AMV. Another development has been the growing competency among second-world manufacturers. Singapore has co-developed its Terrex 8x8 infantry combat vehicle with Turkish manufacturer Okotar. The result is excellent design and reduced price. One of the biggest blunders in this space was the Boxer MRAV which has lost customers because it is virtually undeployable without a large aircraft able to carry its huge 33 tonne mass.

Comment: The NZLAV is an enormous white elephant. It reportedly cost $700,000 to charter a Qantas B747 to fly three to Afghanistan. We have 105. The fundamental problem with the LAV is it costs a fortune to actually use it.  This is why we had to wait until two soldiers had been killed in unsafe leased Humvees before it was finally deployed. It is a combat vehicle but its limited payload means it cannot provide its own logistics. This means its logistic tail is vulnerable to ambush and improvised explosive devices. The vehicle is not amphibious - a serious drawback in South East Asia where almost all other IFV/APCs are. It is heavy, limiting its use on light bridges. It has a very small passenger capability (7) compared to most ICVs. In combat situations it cannot surround a bridge by crossing a river itself, it has to fight for the bridge head-on, and it doesn't have the armour to do that against troops with modern anti-tank missiles. It is even vulnerable to 0.50 anti-material sniper rifles. It is best suited to exercises on the Australian continent.

NH Industries NH90 Helicopter

For a complete background on the machine visit http://en.wikipedia.org/wiki/NHIndustries_NH90
Audit Office report on the acquisition

 $771 million

8 aircraft plus 1 spare machine to be cannibalised for parts

Unit cost 2008 42m

expected life 30 years
 

 Design: NH Industries
 Manufacture: NH Industries
 Unladen weight: 6.4 tonnes
 Fuselage length: 16.13m
 Fuselage width: 4.62m
 Fuel:2035 kgs (internal), two 500kg external fuel tanks, one    400kg internal aux fuel tank
 Maximum lift 4 tonnes.
 Range: 780km (420 nm) with internal fuel, range 1260km (680  nm) with aux fuel and endurance 4.45 hours on internal fuel.
Speed: (Max) 300km/h (160 knots) Cruise 260km/h (124 kts)
 Payload: 
19 passengers. 18 troops in light order (allowing for door gunners) or 12 troops with packs and equipment. Up to 9 stretchers plus medical staff and palletised cargo
Weapons: 2 7.62mm side MGs

NOTE: The RNZAF NH90 does NOT have Forward Looking Infra-red for low altitude night-time operation as yet.

DATA: RNZAF & Wikipedia

  

Operating Costs: The NH90 has not completed a year of operation yet, so RNZAF will have no operating costs data. The rough cost of fuel is US$1000 per tonne. The aircraft therefore carries about US$2,000 worth of fuel to fly 780km or $3.38 per kilometre. This does not include maintenance, repairs or crew. This presentation  says that the average operational costs per flight hour of a complex helicopter is around 5000 but that a variation of 5% of that in a fleet can make a significant difference to the number of machines a force can support. It suggests better simulation-driven preventative maintenance can make a significant difference to operational costs per hour.

Comparative purchases: Russian Mi17. The Thai Army purchased Russian Mi-17 helicopters because they were cheap, proven and rugged. They are not elegant. The Thai's said they could buy three Mi-17's for the price of one UH-60 blackhawk. The same logic impressed India which is spending $1.26bn on Mi-17s. Chile has also bought the Mi-17 despite political pressure from the US. The Mi-17 is operated commercially in New Zealand by Heli harvest Ltd. The Blackhawk was the US replacement to the Iroquois. Unlike the NH90 it was built long and low so it could be redeployed by C-130 (just). It has had years of operational experience and versions are well developed. They have a unit cost of 2008US$48 million. They are however smaller than the NH90.Australia has bought the Seahawk rather than the maritime NH90 for its Navy. At the opposite end of the quality spectrum is the AW101. This has been bought by almost every nation with lots of sea to cover  ( Britain, Italy, Portugal, Denmark, Canada, Japan) because they have huge range (750nm internal fuel) and three engines for safetyPortugal bought 12 AW101 Search and Rescue helicopters for 130 million Euros (NZ$232 million) in 2005. 

Australian example: Australia also operates the NH90. Australia's record with helicopter maintenance is not good and in fact its already grounded its NH90's once. 

Latest technology: The NH90 is pretty much current state-of-the-art for helicopters. In fact it is "bleeding-edge" technology with Sweden and Germany already finding fault with their new machines. One of the problems with the NH Industries group is the company is a joint venture and the machine is a revolution, unlike the Blackhawk which has evolved over time. The future of transport helicopters may well be in tilt-rotor designs. The OV-22 Osprey entered production in 2007. This machine has fantastic range and is perfect for long range maritime operation. Unfortunately it is very expensive. The double contra-rotor plus push-turboprop of the Sikorsky X-2 is another direction for future helicopter design.

Comment: The NH90 relies on the HMNZS Canterbury for international deployment. Canterbury can carry four NH90 helicopters. It can be taken apart and squeezed and squdged into a C-130H Hercules but not easily. The NH90 cannot reach Australia on its own (as the AW101 can). Even flying via Norfolk Island on the specs given by RNZAF (854km from Kaitaia and then 1400km to Byron Bay). Its operational radius on internal fuel does not reach the EEZ from the mainland, quite apart from extensions created by Raoul, Auckland or Chatham Islands. The aircraft has very limited weaponry compared to the Mi-17, UH-60, or AW101.  This is a helicopter for pilots to enjoy flying around New Zealand. It is not suited to our very long-range maritime environment and like the LAVIII it is not readily deployed. Indeed the first models were delivered on a Ukrainian Antonov AN124, the largest freight aircraft in the world and the only aircraft capable of delivering the NH90.

Conclusions

The total value of these three systems comes to $2.719 billion worth of taxpayer sacrifice. This is 25% of the total primary and secondary school asset register (property and buildings) by value.

Do New Zealanders get the equivalent value of a quarter of all state owned education facillities from the Defence Force having two frigates, eight helicopters and 105 light armoured vehicles? 

Particularly given that the LAVs and NH90s won't do very much because they are so hard to deploy?

While NZDF pays a capital charge for sitting on capital that does nothing there is no incentive for it to change its behaviour because ultimately its revenue is obliged to pay regardless. In other words the capital charge comes in from taxpayers and goes back out to treasury and makes no difference to NZDF.

An interesting question then arises. If NZDF did not have these systems what could it not do? As we shall see it could probably still achieve its main objectives. If so, this would suggest the Ministry of defence has wasted $2.7bn worth of taxpayers money.