The federal government is pulling the plug on a 40 million dollar defence project to build six landing craft which proved unsuitable.
The project was launched in 1997 by the then coalition government.
Defence Minister Stephen Smith says the great tragedy of this project is that when the water craft were produced they weren't in a position to be utilised by Australian defence forces.
In 2008 former defence minister Joel Fitzgibbon cancelled the troubled Seasprite helicopter project at a cost of one billion dollars.
Under the watercraft project, defence was to acquire six landing craft, each able to be carried on the deck of landing ships HMAS Manoora and HMAS Kanimbla then lowered onto the water to transport troops and vehicles to shore.
The project was launched in 1997 and in 2001 awarded to defence company ADI, now Thales, with the vessels constructed at ADI's facilities at Carrington, NSW, over 2003-05.
Each measures 25 metres in length and weighs 135 tonnes fully laden. They were designed to be able each to carry a Leopard tank or up to five ASLAV vehicles.
During the past two years defence had invested time and resources on resolving issues with the vessels, Defence Materiel Minister Jason Clare said.
"Most critically, the dimensions and weight of the watercraft meant they were unsuitable to be launched from these ships and are not fit for alternative Australian Defence Force use," he said.
The six vessels have been used for some trials and training but have spent more of their seaborne life moored at a marina in Townsville.
Mr Smith said the project had produced some lessons for defence and further reforms to procurement processes were under consideration.
"That was not a project which defence covered itself in glory at a cost of some $40 million to the Australian taxpayer," he said.
"That is precisely what we are seeking to avoid in the future."
