Air control system acquisition under fire

The company picked to design and build a world-first air traffic control system for Australia has not demonstrated best value for taxpayer money.

That's the finding of an auditor general report into the federal government's OneSKY program released on Monday.

The system is expected to cover 11 per cent of the world's airspace, and integrate defence and civilian air traffic for the first time anywhere on the globe.

The project is expected to cost $600 million to set up and $1.5 billion over 25 years.

Thales Australia won the bid for the project and the system is expected to be ready in 2021.

"It is not clearly evident that the successful tender offered the best value for money," the report said.

"It is also not clearly evident that the successful tender is affordable in the context of the funding available to Airservices Australia and Defence."

Once operational, air traffic controllers will be able to predict plane trajectories in real time, allowing them to co-ordinate flights better and reduce delays.

The report noted no overarching business case had been done, only separate ones by Airservices Australia and Defence.

The Airservices business case has not been reviewed or updated since 2011, but it has started an update that will be ready soon.

The report noted as of January the contract for the entire acquisition and support scope had not been executed.

The contract is unlikely to be signed before mid-2017, 40 months after the tender evaluation started.