OTTAWA - A Defence Department project to modernize its Norad radar systems ran years behind schedule and millions over budget because of management problems, the auditor general reported Tuesday.
Millions of dollars in projected savings from the update project never materialized, the report said.
The system now is up and running, about six years late and total costs are likely to run almost $60 million more than the original forecast of about $93 million.
The auditors said Defence should have classified the project early on as a large, high-risk program and applied special oversight mechanisms designed to handle such risky ventures.
"Early signs that the project was in trouble and that costs were climbing did not prompt moves to strengthen its oversight,'' the report said.
The audit also said the department didn't provide timely or accurate information to the government when it asked for more money for the radar program, nor did it detail the risks involved and how the scope of the program had changed.
Norad, the North American Aerospace Defence Command, is a 50-year-old, Canada-U.S. organization charged with watching for air- and space-born threats.
The radar modernization deal began in 1997 as a partnership with the United States military. Canada was to pay half of the common costs of the modernization, but Canadian officials couldn't provide any evidence that they actually shared control of the program.
In fact in 1999, after Canada had spent $65 million on the project, the Americans cancelled the contract for the new system, leaving the Canadian military with the same old radar it had before the project began.
Canada then decided to go it alone on a new system. At the same time, it was replacing the old, Cold War underground bunker at North Bay, Ont., which had housed the radar system.
By 2004, the Americans came up with a new proposal for the radar and Canada agreed to go along, while developing its own system as a fallback. Eventually, the Canada-U.S. system was installed and went into service last October.
However, costs for the new, above-ground complex built at North Bay to replace the bunker also ran high.
The department had estimated the new system and the new building would mean saving $16 million a year, but the auditors said that hasn't happened.
For one thing, the bunker was designated a heritage site, meaning Defence is stuck with certain maintenance costs for the time being. And although the new system was supposed to need fewer operators, that doesn't appear to have happened.
"Because of the way this modernization project was structured and managed, it has cost National Defence significantly more than originally planned,'' the audit concluded. "Decisions were made without complete information or an understanding of real savings.''
In its response, Defence agreed with the criticisms and said it would take steps to address them.
