The Failure of Project Sirius and its Metamorphosis into Project Guardian

The Best and Final Offer price from Raytheon was indicated as being NZ$445 million,[25] and the final decision on the offer was due on 28 May 2000. A briefing for the Minister of Defence was conducted in April 2000, prior to the decision going to Cabinet the following month. In the event, Raytheon extended its offer until 25 August 2000, allowing somewhat more time for the issues involved to be considered both by the Minister of Defence, Mark Burton, and by the Government.

The potential expenditure of almost half a billion dollars once more generated significant media comment. Gordon Campbell, in an article in the New Zealand Listener commented:

The F-16s were an easy call. In coming weeks, the Clark Government faces a tough and diplomatically fraught decision over Project Sirius, the hugely expensive upgrade of our six Orion maritime surveillance aircraft. Secrecy rules. For the last couple of years, the cost estimates for Sirius … have been kept under wraps.[26]

The Government subsequently released the Defence Policy Framework in June 2000. In the Introduction to the Framework, it was emphasised that a new approach to defence was one of the Government’s major policies when it sought election. Within the new framework it was still recognised that maintaining effective maritime surveillance capabilities of the RNZAF remained one of the greatest needs. The emphasis however, was to be ‘within the New Zealand EEZ [Exclusive Economic Zone] and the EEZs of Pacific Island States’.[27] Nevertheless Cabinet, at a meeting on 12 June 2000, did allow for consideration of Project Sirius before completion of the Maritime Patrol Review:[28]

(e) agreed that urgent acquisitions which are fully consistent with the Government’s defence policy, goals and priorities may be considered prior to the completion of the reviews referred to in paragraph (c) above.[29]

By the time Project Sirius went to Cabinet for a decision in August 2000, the costs however were only too clear. In a paper to Cabinet dated 14 August 2000, the Minister of Defence proposed four possible options for the future of the Orion Maritime Patrol Force:

The response, noted in the Cabinet Minutes of 21 August 2000, was brief and to the point: ‘(b), agreed not to proceed with Project Sirius’.[31]

The response by Opposition parties to the announcement was swift, with both ACT and National suggesting that the Labour–Alliance Coalition was dragging New Zealand into an isolationist stance. Wayne Mapp, National’s defence spokesperson, suggested that the focus on re-equipping the Army was being used as a smokescreen whilst the Air Force was downgraded, ‘into some kind of “freight service.”’[32] The response by the Australians was equally swift, but muted, with their Minister for Defence, John Moore, saying: ‘We understand the priorities assigned by the Government of New Zealand to upgrading the capabilities of its army … we are disappointed though, by the New Zealand government’s decision to cancel Project Sirius.’[33]

The United States was said to be highly concerned about the Cabinet decision on Project Sirius, having indicated previously that approval would be a sign that the Coalition Government was serious about regional security. However Phil Goff, Minister of Foreign Affairs and Trade, speaking on the eve of his departure to the United States, said he did not expect a cool response from the Americans over the decision. The Green Party, on the other hand, was very pleased, and gave strong support to the Government’s decision. Wayne Mapp went so far as to suggest that the Greens controlled defence policy. He commented, ‘Labour has rolled over to extreme Green isolationist views’, and added, ‘abandoning the upgrading of the Orions means we will no longer have proper surveillance of our region.’[34] However, Keith Locke was delighted to see this apparent shift away from combat capabilities. He noted that the decision would see New Zealand move away from operations such as those in the Persian Gulf with the US-led task force simply because the Orions would no longer have the sophisticated capability necessary to operate with US and coalition partners.[35]

Lending weight to the notion of the abandonment of a sophisticated upgrade for the Orions, two days later the Prime Minister commented: ‘Anyone who argues $560 million for the Orions when there is no evidence of hostile submarines in our area would have to be barking.’[36] Weighing up trade-offs was to be part of the remit of the Maritime Patrol Review.[37] However, Helen Clark commented on this in an article in the RSA Review in October 2000, saying:

Defence purchasing is hugely expensive, and there are severe limits on what the government can do without seriously affecting baseline expenditure on and capital provision for other top priorities like Health, Education and Infrastructure. The purchase of 105 armoured personnel carriers and 1853 radios for the Army represents a very significant increase in defence spending. It is not possible to accommodate that and other high priorities as well as invest in the proposed $562 million Orion upgrade.[38]

Notwithstanding the cancellation of Project Sirius, the Government had signalled the importance of maintaining effective aerial maritime surveillance in its Defence Policy Framework announced in June 2000. Defining what ‘effective’ meant was to be the task of a committee convened by the Department of the Prime Minister and Cabinet. At its meeting on 21 August, Cabinet had proposed the establishment of a special group, chaired by the Prime Minister, to include the Deputy Prime Minister, Minister of Finance, Minister of Defence, and Minister of Fisheries, consulting with other relevant Ministers. This group was to examine how civilian requirements for maritime patrol could be best met, and whether a military maritime patrol capability should be retained at all. They were to be assisted in this task by the Officials Committee, whose report was to be completed by February 2001.

At the time of the announcement of the cancellation of Project Sirius, the Chief of Air Staff, Air Vice Marshal Don Hamilton, was pragmatic in his response. In an article in Air Force News in September 2000, he said: ‘I too share your disappointment, and we must simply now take the time to absorb the Government’s direction and define the new role requirement.’[39] The definition of the new role requirement was once more to see the conventional role of the Orions being questioned, with stinging criticism from a number of quarters.

Having been asked to examine whether a military maritime patrol capability should be retained, the Review Committee, echoing somewhat the arguments that had been put forward with regards to the air strike capability, commented:

While the Orions have provided military benefits in training and exercises in the 35 years that the RNZAF has operated them, the reality is that on no occasion have they been used in combat or peace keeping duties, despite a willingness and capability to use them. It is the view of the committee that New Zealand does not need to maintain a maritime patrol force that includes an anti-submarine capability. In neither the arguments we have heard in the course of our review, nor in past experience, have we found compelling evidence that such a capability is essential for national security.[40]

The Review Committee went on to say:

If anti-submarine warfare is no longer a priority, it could be argued that there is less case for keeping the Orions, because ASW [anti-submarine warfare] is the main thing they did markedly better than the alternatives. We already own the Orions however, and the Air Force has accumulated considerable expertise in their use. If the government wanted to retain them for their long distance and long endurance capabilities, our assessment is that they could be upgraded to do local tasks, civilian and military, perfectly well at a modest cost per aircraft.[41]

The Government’s Defence Policy Framework had also clearly spelt out the Government’s defence policy objectives and these were:

However, in the somewhat benign environment of late 2000 and early 2001, the Maritime Patrol Review, in reviewing the need for Military Maritime Patrol Capabilities (MMPC), sought to concentrate on only the first four of the five stated Government policy objectives. The Review effectively dismissed any future global role for the Orions, with their observation that the Orions had never been used in combat or peacekeeping duties, and their recommendation that the maritime patrol force did not need an ASW capability.[43] When it came to anti-submarine capabilities, the Prime Minister was not convinced either: ‘We would be most unlikely to spend on the anti-submarine warfare capability’, she said in March, following the release of the Review. ‘We were being asked to spend more than half a billion dollars to spot vessels which aren’t there and haven’t been found to be there in the entire time we’ve been trying to spot them.’[44]

There was a very real threat to the future of the Orions contained within the Maritime Patrol Review. The Review Committee noted that savings of the order of NZ$40-60 million could be made annually if the Orions were disposed of, though they did acknowledge this might mean buying more C-130 Hercules to take over the role. The committee found that, overall, a ten-fold increase in aerial patrol was necessary to fulfil civil surveillance needs, but that much of this extra effort was needed to cover mid-range contingencies, and suggested either the use of commercial services, or using RNZAF King Air aircraft in conjunction with pilot training. For long distance surveillance they suggested two options also:

The following month the Minister of Defence responded to the Review, in a paper to the Cabinet Policy Committee, Sustainable Capability Plan for the New Zealand Defence Force. In this paper the Minister noted that NZ$100 million had been spent on Project Kestrel, providing an effective aircraft for a further 20 years, and that it made no sense to look at alternatives. Everyone though agreed that the sensors on the Orions needed to be replaced, but the capability that would have been offered by Project Sirius was not required. The Minister recommended instead: ‘65.7.2—A limited upgrade for the Orions be progressively implemented with priority given to those systems that would give them an appropriate and affordable suite of sensors to perform these tasks.’[46]

Cabinet agreed, almost. The Minutes of the meeting of 2 April 2001 record the decision as follows: ‘1.7.2—A limited upgrade for the Orions, using good quality commercial systems wherever possible be progressively implemented, with priority given to those systems that will give them an appropriate and affordable suite of sensors to perform these tasks.’[47]

The Government, however, was yet to define what ‘good quality commercial systems’ actually meant.

Before the recommendations to equip the Orions with commercial surveillance equipment could be implemented, however, international circumstances were to change. On 11 September 2001, nine months after the Review was published, the world we live in was to change. The destruction of the twin towers of the New York World Trade Center, and the attack on the Pentagon in Arlington, VA, was to help define a new focus for the Western alliance. The ‘war on terror’ was about to commence, and as US President George W. Bush said so clearly in November 2001: ‘A coalition partner must do more than just express sympathy; a coalition partner must perform … all nations, if they want to fight terror, must do something.’ To underscore the importance of the message, Bush added what were to become immortal words: ‘Over time, it’s going to be important for nations to know they will be held accountable for inactivity. You are either with us or against us in the fight against terror.’[48]

On this occasion New Zealand was with the United States, and was to make a substantial contribution to the ‘war on terror’.

In May 2002 a proposal for a NZ$390 million upgrade was to have gone before Cabinet, but the Prime Minister was said to have asked officials to come back with a less expensive option saying ‘officials beaver away, but the Government is not going to tolerate a reinvention of Sirius under another name’.[49]

During 2002, however, the Government’s attitude towards the Project began to change. As the nature of the upgrade was investigated further, politicians who had originally opposed the upgrade came to see its wider utility:

As we told them what was needed to meet the Government’s requirements, although there was no requirement for an ASW upgrade, almost every other piece of equipment to be upgraded met a clearly identified need. What distinguished Project Guardian from Sirius was the amount of consultation undertaken. So many agencies had an interest, and so many agencies wanted the upgrade. Project Guardian was very much tailored to a whole of government solution.[50]

Ultimately the predicted costs in the Defence Long-Term Development Plan published in June 2002 were set at NZ$150–220 million for the Missions Systems Upgrade, with a share of a further NZ$320 million for the Communications and Navigations Systems Upgrade, for a total of 11 Orions and Hercules.[51]

In November 2002 the Government announced its intention to send Hercules and Orion aircraft to Afghanistan and the Persian Gulf to join Operation Enduring Freedom.[52] The country’s response to, and willingness to be involved in, the ‘war on terror’, as well as a growing recognition of security needs close to home, clearly reinforced the need for an airborne surveillance facility of significant ability.

That same month, with officials having continued to beaver away, the Minister of Defence put forward a proposal for approval to go to tender for the Orions’ Mission Systems Upgrade and Communication and Navigation Systems Upgrade.[53] In this paper the Minister put forward three options for the Mission Systems Upgrade. In the attached Defence Long-Term Development Plan Update, the Minister noted that, because of the differences in requirements for the Orions and the Hercules Communications and Navigation Systems upgrade, the projects had been de-coupled, and significant savings could be made on the Orion upgrade.[54] Approval to go to tender was given at a Cabinet meeting on 11 December 2002, and the Minister said that the cost of the upgrade would probably be in excess of NZ$300 million, and that tender costs would go to Cabinet at the end of 2003.

It was in fact January 2004 when the preferred tenderer was chosen, and August 2004 when Government approval to negotiate was given. On 5 October 2004 a contract for NZ$352 million was signed for the upgrade package. In a background paper attached to the media statement announcing the signing of the Orion upgrade, the Labour-led Government’s goals and objectives were spelt out:

The Orions play an important part in the surveillance of New Zealand’s Exclusive Economic Zone (EEZ) and surrounding waters, the Southern Ocean and the Ross Sea. The aircraft are also used to meet our South Pacific search and rescue obligations and assisting with EEZ surveillance. The Orions can also contribute to regional and global security, such as their recently completed deployment to the Arabian Sea area in support of the international campaign against terrorism.[55]

Without any change in the Government Defence Statement,[56] the interpretation of what was needed to meet the Government’s goals and objectives had moved significantly from what had been signalled in the Maritime Patrol Review—an aircraft which ‘could be upgraded to do local tasks, civilian and military, at a modest cost per aircraft’.[57] What the Government clearly signalled when the new upgrade contract was signed was a move to a level of sophistication and capability, albeit without an upgraded ASW capability, that had been sought under Project Sirius. As the Minister explained:

The Orions will have a similar suite of sensors to the maritime patrol craft operated by our main security partners. They will also have a range of communication systems capable of sharing information with other forces. These capabilities will ensure that the aircraft are fully inter-operable and able to work closely with our security partners.[58]

The Minister continued:

Maritime patrol aircraft, such as the Orion, have traditionally been used primarily to conduct maritime surveillance operations. It is now increasingly regarded as a multi-role aircraft. Once upgraded its ability to support both maritime and land operations will significantly enhance the NZDF’s ability to achieve a range of policy objectives.[59]

Wing Commander John Lovatt, the Commanding Officer of No. 5 Squadron clarified some of the new capabilities in an article in Air Force News:

Increasingly we can expect to see the P-3 providing support to new and emerging security threats, in particular transnational crime (including illegal immigration, drug trafficking, and smuggling of endangered species), the exploitation of natural resources and terrorism. … The Orion will evolve from a maritime patrol aircraft into a multi-mission platform that is able to effectively conduct, coordinate and participate in both our traditional roles and evolving surveillance and reconnaissance operations, spanning maritime, littoral, and overland environments.[60]

[25] Keith Locke, ‘Project Sirius is needless keeping up with Joneses’, New Zealand Herald, 9 May 2000.

[26] Campbell, ‘More Sirius money’, p. 22.

[27] The Government’s Defence Policy Framework, Ministry of Defence, Wellington, June 2000, p. 8.

[28] Maritime Patrol Review.

[29] CAB (00) M 19–10, p. 1.

[30] POL (OO) 1993, pp. 1–2.

[31] CAB (OO) M28/9.

[32] New Zealand Herald, 24 August 2000.

[33] ‘New Zealand Defence Acquisitions’, Media Release MIN 231/00, Hon. John Moore, MP, Minister for Defence, 23 August 2000.

[34] Wayne Mapp, Press Release, 22 August 2000.

[35] New Zealand Herald, 22 August 2000.

[36] Evening Post, 24 August 2000.

[37] Maritime Patrol Review.

[38] Rt. Hon. Helen Clark, ‘The Government’s defence priorities explained’, RSA Review, October 2000.

[39] Air Force News, no. 8, September 2000, p. 5.

[40] Maritime Patrol Review, p. 23.

[41] Maritime Patrol Review, p. 28.

[42] The Government’s Defence Policy Framework, p. 4.

[43] Maritime Patrol Review, pp. 19–23.

[44] New Zealand Herald, 15 March 2001.

[45] Maritime Patrol Review, p. 37.

[46] Sustainable Capability Plan for the New Zealand Defence Force, 25 March 2001. Paper attached to POL(01)18, p. 11.

[47] CAB(01)100, p. 3.

[48], ‘Bush says it is time for action’, available at <>, accessed 28 October 2008.

[49] New Zealand Herald, 19 May 2002.

[50] Graham Fortune, Secretary of Defence, Personal interview, 14 February 2005.

[51] Defence Long-Term Development Plan, Wellington, June 2002.

[52] Air Force News, July 2003, p. 11.

[53] P-3 Mission Systems Upgrade and Communications and Navigation Systems Upgrade. A paper prepared for Cabinet from Office of Minister of Defence, November 2002.

[54] Defence Long-Term Development Plan (LTDP)—Updated, November 2002.

[55] Minister of Defence, Hon. Mark Burton, Background: Royal New Zealand Air Force P-3 Orions, Wellington, 5 October 2004, p. 1.

[56] Government Defence Statement, A Modern, Sustainable Defence Force Matched to New Zealand’s needs, Ministry of Defence, Wellington, 2001.

[57] Maritime Patrol Review, p. 28.

[58] Burton, Background: Royal New Zealand Air Force P-3 Orions, p. 3.

[59] Burton, Background: Royal New Zealand Air Force P-3 Orions, p. 1.

[60] Air Force News, February 2005, p. 2.