Annual Report for the year ended 30 June 2007
Part 3: Departmental financial statements (continued)
Output Class - Management of equipment procurement
Medium range anti-armour weapon for the New Zealand Army
Objective
To acquire a medium range anti-armour weapon that will provide land forces with a capability against armoured vehicles and other targets.
In 2006/07 it was planned to complete deliveries of this weapon.
Performance
A majority of components of this system have been delivered and training is well advanced. Missile delivery is expected before year end and will complete the project.
Photo of New Zealand Javelin detachment in action in Waiouru.
| Financial summary of project costs charged to non-departmental appropriations as at 30 June 2007 (GST inclusive) | ||
|---|---|---|
$ |
||
| Project approval | 23,856,000 | |
| Foreign exchange variances to date and forecast to complete | (1,984,710) | |
| GST | 2,982,000 | |
| Total approved cost | 24,853,290 | |
| GST exclusive | ||
| Expenditure to 30 June 2006 | 16,468,916 | |
| Expenditure 2006/07 | 1,024,072 | |
| Future commitments and forecasts | 4,378,001 | |
| 21,870,989 | ||
| GST | ||
| GST to 30 June 2006 | 838,310 | |
| Expenditure 2006/07 | 101,242 | |
| Future commitments and forecasts | 2,042,195 | |
| 2,981,747 | ||
| Total forecast cost to complete | 24,852,735 | |
- Foreign exchange variances at 30 June 2007 are favourable by $1.985 million due to the purchase rates of the USD currency being better than the USD exchange rates used in the Cabinet paper for financial approval.
USD approval rate = 0.5841
USD forecast average rate = 0.6503 - Commitments and forecasts are valued using an average exchange rate of forward contracts still to be settled, plus the actual exchange rates for currencies in the bank. The exchange rate used to calculate commitments and forecasts at 30 June 2007 was USD = 0.6525.
Low level air defence system for the New Zealand Army
Objective
To purchase an alerting and cueing system to bring the Army’s Mistral air defence system up to an improved operational standard.
In 2006/07 it was planned to complete delivery of the weapon system.
Performance
The system has been delivered, accepted by the Ministry, and handed over to the NZDF. Integration into in-service equipment and logistic support arrangements will be completed in 2007/08.
| Financial summary of project costs charged to non-departmental appropriations as at 30 June 2007 (GST inclusive) | ||
|---|---|---|
$ |
||
| Project approval | 13,728,376 | |
| Foreign exchange variances to date and forecast to complete | 533,234 | |
| GST | 1,716,047 | |
| Total approved cost | 15,977,657 | |
| GST exclusive | ||
| Expenditure to 30 June 2006 | 7,170,522 | |
| Expenditure 2006/07 | 6,838,407 | |
| Future commitments and forecasts | 251,538 | |
| 14,260,467 | ||
| GST | ||
| GST to 30 June 2006 | 12,988 | |
| Expenditure 2006/07 | 1,491,490 | |
| Future commitments and forecasts | 212,345 | |
| 1,716,823 | ||
| Total forecast cost to complete | 15,977,290 | |
- Foreign exchange variances at 30 June 2007 are unfavourable by $0.533 million due to the purchase rates of the EUR currency being worse than the EUR exchange rates used in the Cabinet paper for financial approval.
EUR approval rate = 0.5187
EUR forecast average rate = 0.4986 - Commitments and forecasts are valued using an average exchange rate of forward contracts still to be settled, plus the actual exchange rates for currencies in the bank. The exchange rate used to calculate commitments and forecasts at 30 June 2007 was EUR = 0.4542.
Upgrade and refurbishment of C-130H aircraft for the Royal New Zealand Air Force
Objective
To extend the life of the Royal New Zealand Air Force (RNZAF) C-130H aircraft by upgrading the aircraft mechanical and electrical equipment, undertaking a level of structural refurbishment work and an upgrade of communication/navigation systems.
In 2006/07 it was planned to:
- monitor work on the modification of the prototype aircraft
- induct the first production aircraft (second of the fleet) into the programme.
Performance
The prototype aircraft is undergoing modification and monitoring of contractors’ performance continues. The first aircraft is scheduled to be completed by mid 2008, with the final aircraft scheduled to be completed in mid 2011.
Photo of the C-130 Hercules on deployment in Afghanistan.
| Financial summary of project costs charged to non-departmental appropriations as at 30 June 2007 (GST inclusive) | ||
|---|---|---|
$ |
||
| Project approval | 233,739,000 | |
| Foreign exchange variances to date and forecast to complete | (2,716,571) | |
| GST | 29,217,000 | |
| Total approved cost | 260,239,429 | |
| GST exclusive | ||
| Expenditure to 30 June 2006 | 109,851,485 | |
| Expenditure 2006/07 | 52,192,562 | |
| Future commitments and forecasts | 68,889,460 | |
| 230,933,507 | ||
| GST | ||
| GST to 30 June 2006 | 110,175 | |
| Expenditure 2006/07 | 133,472 | |
| Future commitments and forecasts | 28,973,350 | |
| 29,216,997 | ||
| Total forecast cost to complete | 260,150,504 | |
- Foreign exchange variances at 30 June 2007 are favourable by $2.717 million due to the purchase rates of the CAD currency being better than the CAD exchange rates used in the Cabinet paper for financial approval. The USD rate is slightly unfavourable.
CAD approval rate = 0.7857
CAD forecast average rate = 0.8390
USD approval rate = 0.6748
USD forecast average rate = 0.6729 - Commitments and forecasts are valued using an average exchange rate of forward contracts still to be settled, plus the actual exchange rates for currencies in the bank. The exchange rates used to calculate commitments and forecasts at 30 June 2007 was CAD = 0.8338 and USD = 0.6525.
Upgrade of P-3K Orion mission systems for the Royal New Zealand Air Force
Objective
To upgrade the sensors, mission management systems and communication-navigation system required for the RNZAF’s P-3K Orion maritime patrol aircraft to conduct surface surveillance tasks.
In 2006/07 it was planned to monitor the modification of the prototype aircraft.
Performance
The monitoring of contractors’ performance continues. The first aircraft will be completed in the latter half of 2008 with the final aircraft completed in early 2011.
Photo of P-3K Orion.
| Financial summary of project costs charged to non-departmental appropriations as at 30 June 2007 (GST inclusive) | ||
|---|---|---|
$ |
||
| Project approval | 373,069,314 | |
| Foreign exchange variances to date and forecast to complete | (28,437,617) | |
| GST | 46,633,667 | |
| Total approved cost | 391,265,364 | |
| GST exclusive | ||
| Expenditure to 30 June 2006 | 176,336,963 | |
| Expenditure 2006/07 | 37,716,060 | |
| Future commitments and forecasts | 129,392,929 | |
| 343,445,952 | ||
| GST | ||
| GST to 30 June 2006 | 1,217,506 | |
| Expenditure 2006/07 | 214,992 | |
| Future commitments and forecasts | 45,201,279 | |
| 46,633,777 | ||
| Total forecast cost to complete | 390,079,729 | |
- Foreign exchange variances at 30 June 2007 are favourable by $28.438 million due to the purchase rates of the USD currency being better than the USD exchange rates used in the Cabinet paper for financial approval.
USD approval rate = 0.6107
USD forecast average rate = 0.6677 - Commitments and forecasts are valued using an average exchange rate of forward contracts still to be settled, plus the actual exchange rates for currencies in the bank. The exchange rate used to calculate commitments and forecasts at 30 June 2007 was USD = 0.6525.
