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Concerns have been raised about the potential budget blowout for the redevelopment of key defence infrastructure at the Cocos Islands, an Australian external territory bordering key sea lines of communication in the Indian Ocean.
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The ABC has reported there is a growing concern that proposed infrastructure upgrades on the Cocos (Keeling) Islands will experience a major cost overrun, as works are scheduled to begin later this year.
Announced by the former government in December 2020, by then defence industry minister Melissa Price, the projected scope of works was estimated to cost $184 million and was stated to “strengthen and widen the existing runway and hardstands, and provide a new aeronautical ground lighting to support the P-8A Poseidon maritime surveillance and response aircraft, and other aircraft operations”.
However, according to the ABC, updated costs presented to the parliamentary standing committee on public works (PWC) have revealed that the proposed costs have blown out to be now worth $568 million, a $384 million increase on the original costs cited.
A Defence spokesperson explained to the ABC, “The scope of the project has increased to include a 150-metre runway extension and additional supporting infrastructure. The cost of materials, labour and logistics has increased significantly over the past two to three years.”
“The airfield works have been designed to minimise disruption to commercial passenger and freight aircraft movements, which will be able to continue to operate during the works,” the spokesperson added.
Australia’s own Cocos (Keeling) Islands have long been identified as a key strategic force multiplier for both Australian and allied use.
As recently as 2017, the joint standing committee on the national capital and external territories sought to identify the strategic opportunities for developing and enhancing the strategic importance and capabilities of the islands to support increased Australian engagement in the Indo-Pacific.
The islands have also become increasingly important to Australia’s allies, mainly the US as it has sought to “pivot” towards Asia in response to increasing Chinese assertiveness.
The Obama administration’s “Asia Pivot” outlined in 2012 kicked off growing speculation about the future of the islands, with The Washington Post identifying the strategic importance of the islands to the US and Australia, which ABC journalist Samantha Hawley explained during an interview with then defence minister Stephen Smith: “It might be down the track, but it’s undeniable that the US is eyeing off the Cocos Islands as a base to launch drones and manned US surveillance aircraft.
“The Washington Post newspaper has catapulted the prospect back into the headlines. The report states aircraft based in the Cocos Islands would be well positioned to launch spy flights over the South China Sea and would be considered as a replacement for the American Diego Garcia air base.”
