The $7 billion project to create Australian military satellites could soon be halted amid a defense spending review

A $7 billion program to create a military-grade Australian satellite communications system is at risk of being cancelled, with the Prime Minister insisting the government is busy “prioritising” all defense purchases.

Eighteen months ago, US defense giant Lockheed Martin was selected to provide a strengthened network of three to five satellites to provide high-level protection against cyber and electronic warfare attacks in what would have been Australia’s largest ever defense space contract.

The project – known as JP9102 – was expected to include locally controlled and operated geostationary communications satellites, as well as multiple ground stations, but on Monday The Australian reported it could soon be scrapped.

Lockheed Martin Australia beat rival bids from Airbus, Northrop Grumman and Optus to be named preferred tenderer, but contracts for the work have not yet been signed.

Prime Minister Anthony Albanese did not confirm the project would end in an interview with ABC Radio on Monday, but insisted Labor would “make decisions based on advice and in the national interest”.

“We are busy prioritizing all our purchases when it comes to defense resources, we have significantly increased our defense budget and we will ensure that all decisions we make are in our national interest,” he said. .

“Not only are we seeing progress with the AUKUS schemes being on schedule, on time and on budget, we are seeing our capabilities increasing with increased asset purchases, we are also very interested in this being part of our ‘future made in Australia’.” ‘agenda’.

There are cheaper options available, industry figures say

A defense source with knowledge of the current deliberations told the ABC that while projects were being reviewed, the department was having to make cuts totaling billions, rather than “slicing salami into several projects already under contract”.

Defense industry figures believe cheaper options are available, which would see Australian space assets placed on existing satellites owned by US companies.

But defense analyst Malcolm Davis of the Australian Strategic Policy Institute described the cancellation of JP9102 as a “mind-bogglingly stupid” move that threatened to undermine the country’s credibility.

“Without communications you are not in the fight – Australia cannot have a sovereign defense force without sovereign satellite communications,” he said.

“And the defense industry cannot invest in Australia if the government is a weak customer.”

Last year, Defense Secretary Richard Marles said the government was “confident in our continued presence in space” after the ABC revealed hundreds of Chinese satellites had been deployed over Australia to monitor military exercises.

That same year, Labor also scrapped a Morrison government program to develop new Australian satellites to collect data on natural disasters, agriculture and marine surveillance as part of budget cuts.