[Peetwo]

Sir A & the Bored off the hook (again) - (YAWN!)  

While waiting for Hansard. Notes.

As it happened – as it was predicted; the Whostoblame ‘interview’ by the committee was pretty much a non event. Only listened to the first 30 minutes – just for fun – but the first 15 minutes wrapped it up. A nervous Sir Angus took time to deliver a 10 minute bus ticket read out. He went to some lengths to point out that the ‘Board’ had nothing to do, whatsoever, with the carrying’s on of the lesser mortals. It was all very smooth; unless you count the nervy ‘look-ups’ at the committee at the less than robust (thin) points raised. He does it every time; love to play poker with this bloke. Every thin line read is followed by an ‘up and under’ glance at the committee; to see if they are swallowing it whole or just chewing. To sum up my short listen/watch session: the board is off the hook. Repeat that 50 times until tedium sends you to sleep. Message delivered.

Time beat me; should have watched/listened to the whole thing. No matter, the ever reliable secretariat will provide the whole ‘vision splendid’ and we can all nod off. Just keep an eye out for the bus; you never know.

Sir A: "Do you think they swallowed it??"

Keeping in mind that ASA is major sponsor of Oz Aviation, yesterday Gerard Frawley gave us another another version of the - "nothing to see here move along"  - plus a free promotion for the achievements of the Bored to nearly being ready (after 6 years of feasting from the OneSKY trough) to sign off on a Thales open cheque contract - UDB!

Ninety-nine per cent there on OneSky contract – Airservices chair

August 9, 2017 by Gerard Frawley 
OneSky will replace both Airservices’ The Australian Advanced Air Traffic System (TAAATS) to manage civil airspace and the ADF’s Australian Defence Air Traffic System (ADATS).

Airservices Australia board chair Sir Angus Houston has told a Senate committee that the air navigation service provider is “99 per cent ready to go” to sign contracts for the new OneSky air traffic management system.

Since February 2015 Airservices has been negotiating with Thales as its preferred supplier for the OneSky project for a new civil and military air traffic management system (or CMATS), but the main acquisition and support contracts for the new system, which will be funded by both Airservices and the Department of Defence, have yet to be signed.

“We’re getting close, 99 per cent of the paperwork is contract ready, that means we’re getting very close,” Sir Angus told members of the Senate Rural & Regional Affairs Transport Legislation Committee on Wednesday.

Some risk mitigation work for OneSky has already been undertaken under advance supply contracts, but finalising the main acquisition contract has been delayed while Airservices and Thales agree to terms, especially in the light of a recent Australian National Audit Office audit which raised concerns about the tender evaluation process’s ability to deliver value for money on the near billion dollar project.

But Sir Angus told the committee that Defence is close to seeking government approval for its share of the program from the National Security Committee (NSC) of Cabinet.

“Right now we are about 99 per cent ready to go into contract on our side, we just need to finalise the arrangements with Defence after they’ve been through [the NSC approval process].”

However, the Airservices chair did indicate that Defence’s share of the OneSky project is likely to be greater than a previously agreed “not to exceed” price of $244 million.

“We’re at a stage where Defence are going back to the National Security Committee of Cabinet for a final approval on the project with some form of cost increase,” he said.

Airservices has not publicly put an exact number on the value of its own share of the OneSky program, however the organisation’s new five-year corporate plan, released on Tuesday, records that “OneSKY and its enabling projects account for $652 million” in capital expenditure over the next five financial years, through to the end of 2021-22.

“Much of the delay in finalising this contract is because the board will not sign a contract until such time that it is satisfied that we can protect Airservices commercially under these arrangements,” Tim Rothwell, Airservices board member and chair of the board’s audit and risk committee, told the Senate.

Another of the ANAO report’s criticisms was that the Airservices business case for OneSky had not been reviewed or updated since January 2011.

“The latest cost estimates have been included in Airservices’ corporate plans, including the one tabled yesterday, so it’s not as if the cost estimates were unknown, but the final business case will be provided to the board as part of the approval process, hopefully towards the end of this year when we do hopefully contract to get this project underway,” Rothwell said.

Fellow Airservices board member David Marchant, chair of the board’s technology committee, told the Senate committee Airservices had moved to an open book process as part of contract negotiations to ensure value for money.

“We’ve stopped going to contract until we’ve got the definition and the design absolutely right and it’s absolutely in agreement with Defence and ourselves,” he said.

“Secondly, we’ve moved to a full ‘open book’ process for every cost, for every activity and are going through and assessing those against that design criteria, so we don’t have to go retrospectively back [to make changes once contracts have been signed].

“And the reason for the comment about the business case and the rest is that until that’s concluded and the risks and contingencies all through those things are put out in the open and mitigated down, that’s when we’ll get to a final cost and a final risk and a final mitigation.”

Open book contract management is a contracting arrangement favoured in government procurements in the United Kingdom. It allows “the scrutiny of a supplier’s costs and margins through the reporting of, or accessing, accounting data,” according to the UK’s Crown Commercial Service.

“This transparency allows both parties to be clear on the supplier’s charges, costs, and planned return. It also provides a basis to be able to review performance, agree the impact of change and to bring forward ideas for efficiency improvements.”

   
This was followed today, by another Oz Aviation Airservices promo, where Sir A & Harfwit in an attempt to further justify their positions, are obviously trying to placate the big end of town Airlines with a 10% reduction to airservices charges...

Airservices promises real cost reductions of 10 per cent
August 10, 2017 by Gerard FrawleyAirservices Australia says the benefits of its ‘Accelerate’ restructuring program will allow it to deliver real cost reductions to its aviation industry customers across the next five years.

The government-owned air navigation service provider and aviation firefighting operator released its latest five-year corporate plan on Tuesday, detailing its forecasted financial performance through to the end of the 2021-22 financial year. The plan projects that despite only modest increases in Airservices’ revenues over the five-year period that earnings before interest and tax (EBIT) will rebound strongly, to over $100 million from 2017-18 onwards.

“The plan embeds the cost savings delivered through our new operating model, enables real price reductions of around 10 per cent to be delivered to industry over the next five years, and funds key investment programs to deliver important safety and service improvements,” reads the corporate plan.

“Today our prices are the same as they were in July 2015. Reflecting the delivery of a more efficient operating cost base through our new operating model, this plan maintains weighted average prices at existing rates, delivering our customers real price decreases and improved service value through to 2021-22.”

Airservices’ customer charges are set under five-year Long Term Pricing Agreements (LTPAs). The current pricing agreement came into effect in October 2011 while a new LTPA, which sought to raise charges for air navigation services by an average of 3.3 per cent a year over the five years from 2016, was deferred.

The federal government also stands to benefit from the turnaround in Airservices’ financial performance, receiving a dividend of almost $9 million in 2017-18 rising to around $20 million in subsequent years.

“With capital expenditure funding requirements remaining high, this plan maintains current dividend payout ratios at 30 per cent of net profit after tax. This is projected to return an average of $17 million in dividends each year,” the plan reads.

Much of Airservices’ capital expenditure over the five-year period is for the OneSky air traffic management system.

“Over the five-year planning period, OneSky and its enabling projects account for $652 million, or 61 per cent, of the total spend.”

The balance of $421 million will be “to improve services and sustain current infrastructure as well as to support new runway operations at Brisbane, Melbourne, and Perth”.

The plan shows for the just completed 2016-17 financial year that Airservices was forecast to post an EBIT of $59.8 million, following a net loss after tax of $127.3 million in 2015-16, the organisation’s first loss in its 20-year history and one largely due to one-off restructuring costs, including staff redundancies.

The corporate plan shows staff costs for 2016-17 to be a forecast $678.8 million, falling to $640.8 million in 2017-18 and rising modestly thereafter.

“Over 2016-17 we successfully transitioned to a new, simpler operating model based on customer needs, with less bureaucracy and more accountability. Our focus is now on sustaining and improving our organisational performance,” the corporate plan notes.
Under Accelerate Airservices’ workforce was to be cut from 4,500 to 3,600.

MTF...P2  

#privatiseAirservicesNOW