Australia rips Boeing for delays on AWACS project

WASHINGTON, June 28 (Reuters) Australian Defense Minister Brendan Nelson on Wednesday blasted Boeing Co. for what he called ''significant delays'' on a 3.5 billion dollar new Airborne Early Warning and Control (AWACS) aircraft it is building for Australia.

''We are very disappointed with Boeing's performance on this project,'' a terse Nelson told a joint news conference with U.S.

Defense Secretary Donald Rumsfeld.

''I think Boeing has let the Australian government down, and I think they've let themselves down,'' he said, underscoring the importance of the program to Australia.

Nelson said he met with top officials of Chicago-based Boeing, the No. 2 U.S. defense contractor, including Jim Albaugh, who heads the company's defense business to discuss the latest delays in the program.

He said senior Australian defense officials would spend the next weeks negotiating a new schedule for the so-called ''Wedgetail'' program with Boeing, adding, ''What I intend to do is to make damn sure that Boeing delivers on the project.'' Ultimately, he said he expected the project to succeed.

''I'm confident we'll get the capability and the outcome that Australia needs and has signed up for,'' he said.

Boeing is building six early warning aircraft, which are based on its 737-700 aircraft, for Australia. Los Angeles-based Northrop Grumman Corp. is building the Multi-role Electronically Scanned Array (MESA) radar for the planes.

Nelson did not say exactly how long it would now take to field the new planes, but Australian news reports put the delay at 18 months and blamed it on testing problems with radar and sensor computer systems.

Boeing spokesman Dave Sloan said the company was building two Wedgetail aircraft for Australia in Seattle, and two of four more were already under construction in Australia.

In January, Boeing said the six planes would be delivered in 2008.

Reuters SK VP0245