A few weeks ago
The Oz
Axe falls on $1bn choppers
Patrick Walters, National security editor | February 18, 2008
NEARLY a year after it earned a reprieve from the Howard government, the navy's $1 billion Seasprite helicopter is set to be axed as the Defence Department undertakes a comprehensive review of major spending programs.
Senior defence sources have told The Australian that it is certain the ill-fated Seasprite program - which is running more than six years late - will be abandoned.
The navy's surface fleet is expected to be equipped with European MRH-90 machines in place of the Seasprites, which were first ordered in 1997.
The 11 twin-engine SG-2G(A) Super Seasprites, equipped with Penguin anti-ship missiles, were destined to operate from the RAN's Anzac-class frigates, performing a maritime strike and surveillance capability for the surface fleet.
But the project, originally costed at $667 million a decade ago, has been dogged by airworthiness and software engineering glitches, making it the most troublesome of Defence's "legacy" projects, arising from poor procurement decisions made by previous governments.
Last year, former defence minister and now Opposition Leader Brendan Nelson recommended the project be axed, but he was overruled by John Howard and his cabinet, who were worried about the negative political fallout from such a move in the lead-up to the November election.
Senior Liberal Party sources told The Australian last week that had the Coalition been returned to office, the axe would have fallen on the Seasprites.
Nine Seasprites have been provisionally handed over to the navy, but the fleet has been grounded while the software problems and air certification issues are sorted out.
The Defence Department has estimated that the Seasprites won't be fully operational until 2010 at the earliest.
In March 2007, the helicopter's manufacturer, US-based Kaman Aviation, warned the Howard government that it would face a lengthy legal battle if it scrapped the program. Kaman said that cancellation would generate an arbitration process that would uphold both the reputation of the Seasprite platform and its manufacturer and expose weaknesses in the Defence Department's equipment procurement system.
Defence Minister Joel Fitzgibbon is examining a range of big defence contracts, including the Howard government's decision to spend $6.5 billion on 24F/A-18 Super Hornet fighters.
Mr Fitzgibbon has ordered a full review of Australia's future air-combat capability in the wake of the Super Hornet buy.
The review, to be completed by the end of April, will examine issues relating to the retirement of the F-111 strike force from 2010 and the planned introduction of the F-35 fighters from 2014. The Super Hornets are due to enter service from 2011 as an interim capability.
Cancelling the Super Hornet contract could cost several hundred million dollars and have an adverse impact on Australia's close ties with Washington, senior defence analysts believe.