Key elements of the £7.1bn Ministry of Defence (MoD) programme to replace hundreds of legacy IT systems with a single infrastructure are running late, though the scheme has already delivered important benefits, according to the National Audit Office (NAO).

In 2000 the MoD began a single secure communications infrastructure strategy, and in 2005 signed a 10 year contract with the ATLAS consortium for the installation and management of the Defence Information Infrastructure Programme.

The programme aims to install 150,000 access terminals in 2,000 locations around the world, but only half of the 62,000 expected to be installed by July 2007 have been rolled out and the completion date for the first increment of the system is 18 months late.

Tim Burr, head of the NAO said: "It was always going to be a demanding task for the Ministry of Defence to replace its diverse information technology with a single, high quality system."

"The MoD started with a clear vision of what it wanted to achieve and acted to address known risks. But the Programme has run into diifculites and further concerted action will be needed to increase the rate of roll out of terminals and to deliver the remaining software."

The NAO praised the MoD for its work to mitigate risk in the project, and for installing at short notice to systems supporting the operations of frontline troops on operations in Afghanistan.

But the report says the original method of rollout for the terminals was unresponsive to the variable state of defence sites, though a new implementation method has been more successful.

It also encouraged The MoD to claim rebates from ATLAS for additional costs caused by delays to the rollout.

It said the MoD project team should also maintain detailed records of extra costs incurred as a result of having to run on legacy systems because of the delays, and pass these costs on to the Atlas consortium as well.