New Zealand navy frigate to leave Canada after 8 years

The HMNZS Te Mana. Photo / New Zealand Defence Force

By RNZ

The second of the country's two naval frigates is due to leave Canada, eight years after an upgrade project began.

The costs to upgrade the ship Te Mana, and before it Te Kaha, have blown out to between $600 million and $700m, due in part to project management mistakes.

Main contractor Lockheed Martin Canada and a subcontractor are mired in a long-running court battle.

Ministry of Defence said that dispute has had no impact on the upgrades.

However, other delays had pushed the project back by more than three years, even before Covid hit.

The deal was inked in 2014 at a budget of just under half a billion dollars, but in 2017 the newly elected Labour-led government was forced to put in another $140m, sparking an exchange in Parliament:

"Cost overruns primarily occurred due to project management mistakes in estimating the cost of the installation of equipment and delays resolving the issue, which made an unacceptable situation worse," then defence minister Ron Mark told Parliament at the end of 2017.

"The previous government was first informed of cost pressures within the project in September 2016," he added.

"That's right. We said, 'Go away'," responded National's erstwhile Defence Minister, Gerry Brownlee.

Te Kaha returned to New Zealand at the end of 2020.

The NZDF annual report for 2020-21 under 'Naval Combat' says "no capability", "0 per cent".

The upgrades were to extend the vessels' operational life to around 2030 - only eight years away.

The Defence White Paper of 2010 said they needed upgrading by 2017 "to address obsolescence and to improve their defensive capability against contemporary air and surface threats".

The upgrades were "for a fixed firm price", deputy secretary of capability delivery Mike Yardley, said in a statement to RNZ on Monday.

"No extra costs have been incurred by the Crown.

"The only additional cost incurred has been to keep the small project team and ship's crew in Canada for an additional three months while the acceptance trials were carried out, and this was provisioned for within the project contingency."

The Defence Force's annual review shows $35m went into the project last year, and $5m the year before; RNZ has asked Defence to clarify if this is from within the main budget that expanded to $639m in 2017, or in addition to it.