Release

OneSKY: Contractual Arrangements audit report

1 Aug 2019

Airservices notes the OneSKY: Contractual Arrangements audit report, which makes no recommendations.

Airservices is confident that the OneSKY contract represents value for money for our airline customers who ultimately fund it. OneSKY is a highly advanced system that will manage both defence and civilian air traffic control for 11 per cent of the world’s airspace for the first time. It will deliver $1.2 billion in benefits to the Australian aviation sector and economy over its life.

Airservices’ share of the OneSKY air traffic control system acquisition cost is $665 million. There is no cost to the taxpayer for Airservices’ share as the organisation is wholly funded by the aviation industry.

There has been no cost overrun. The initial offer from the successful tender contained scope, technical and price risk that was not acceptable to Airservices. The final contracted price for the OneSKY system of $1.205 billion, including the Australian Defence Force component, resolved these risks before Airservices entered into the contract. This was acknowledged by the ANAO in its report. This price was negotiated down from an estimated $1.490 billion in the previous offer.

There is no 10 year delay. The project remains on schedule since signing of the contract in February 2018 and OneSKY will be fully operational by 2025. Airservices delayed entering into a contract to achieve the best value for money outcome. The earliest possible start date envisaged at the start of the tender process was 2021. The existing air traffic control system continues to function at the required level to provide ongoing safe and world-class air navigation services.

Airservices accepts that the audit has identified areas where documentation could have been strengthened to provide a better auditable trail of the decision making process, but notes that this would not have changed the final outcome or the value-for-money price achieved.