---

Labor cleans up Seasprite 'mess'

Billion-dollar dud: A Navy Seasprite goes through its paces (www.navy.gov.au)

The Federal Government has cancelled Australia's $1 billion commitment to the Royal Australian Navy's controversial Seasprite helicopter project.

Defence Minister Joel Fitzgibbon made the announcement at a visit to a Newcastle engineering firm this morning.

The $1 billion Seasprite fleet was due to enter service in 2001 but was indefinitely grounded in 2006.

An upgrade of a 1960s airframe with 21st century avionics, the helicopters are unable to be operated reliably in poor visibility conditions and at night.

A statement from the Defence Department said discussions with the contractor would start immediately.

"Today's announcement demonstrates our determination to make tough decisions whenever required for the security of the nation and the safety and capability of our Defence Force," Mr Fitzgibbon said.

"The decision taken by the Rudd Labor Government is one that should have been taken by the Leader of the Opposition, Brendan Nelson, when he had the opportunity last year.

"But his Government decided to put its own political interests ahead of the national interest. Consequently, the responsibility of cleaning up the mess they created falls to us."

Coalition defence spokesman Nick Minchin says Mr Fitzgibbon must explain what it will cost to drop the Seasprite contract, and what legal action the contractor Kaman will take.

---

---

Don't think I've ever seen a carcass that had to be backed over so many times before it finally died

---

---

I still cannot believe that the price tag is 1 BILLION dollars. Hope all you tax payers in Australia raise hell over this.

---

---

"These tasks will require a through knowledge of nuclear physics, the physical ability of an average grown person and the thought process of a young child. The army has the innate if not magical ability to take what would be the smallest of simple tasks, and break down these tasks, into what would be the same level of a nuclear physics lesson. This is done for some unusual reason, but it is thought that this is done to make a task last longer, and make everyone think 'Why are we doing this'. There is also a school of thought, that persons in command, just do it because they can, why not make the job harder than it has to be, they are not doing it."

---

---

Govt to receive $40m for scrapped Seasprites

The Federal Government says it will receive just under $40 million as part of the agreement to scrap the Seasprites helicopter project.

The Government announced earlier this month it was scrapping the $1.3 billion contract because of safety concerns.

Defence Minister Joel Fitzgibbon says the Government has now agreed on the terms of the cancellation with the contractor Kaman.

The helicopters, training equipment and other spare parts will be sold, and the Government will receive a guaranteed financial return of just under $40 million

---

---

Kaman Corp. (Nasdaq: KAMN) reported today that its subsidiary, Kaman Aerospace International Corporation (Kaman), has reached an agreement with the Commonwealth of Australia that establishes mutually agreed terms for conclusion of the SH-2G(A) Super Seasprite program.

Under the terms of the Agreement, ownership of the 11 SH-2G(A) Super Seasprite helicopters will be transferred to Kaman along with spare parts and associated equipment. The transfer is subject to US government approval and the Commonwealth will carry out that process, which could take several months. Thereafter, Kaman will seek to sell the aircraft to another customer or customers and will share the proceeds of each sale with the Commonwealth under a pre-established formula. Kaman has agreed that at least $37 million (US) of such payments will be made to the Commonwealth regardless of sales, with at least $25 million (US) to be paid by March 2011, and $6 million (US) each in years 2012 and 2013. Under the agreement, Kaman will forego payment on approximately $35 million (US) in net unbilled receivables in exchange for the helicopters, spare parts and equipment, which will be recorded as inventory. The value of this inventory is expected to exceed the amount of the net unbilled receivables and the guaranteed payments.

In commenting on the agreement, Neal J. Keating, chairman, president and chief executive officer of Kaman Corporation, said, "We appreciate the Australian government's willingness to work with us to develop a mutually satisfactory path to conclude their Super Seasprite program. We are also pleased to have the opportunity to sell these highly capable aircraft to another customer."

The Kaman Super Seasprite is currently serving with the governments of Egypt, New Zealand and Poland. The aircraft also served with distinction as a front-line U.S. Navy helicopter, where its reliability and durability were well respected.

Kaman Corp. conducts business in the aerospace and industrial distribution markets.

---

---

On 5 March 2008 the Government announced its intention to cancel the Seasprite helicopter project.

A satisfactory conclusion to the Seasprite project has now been agreed with the contractor, Kaman, to cancel the project on mutually agreed terms. An agreement has today been signed between the Australian Government and the contractor setting out the agreed terms. The agreement has some confidential aspects, however I can say that, subject to US Government approval, the project deliverables including the aircraft, training equipment and spare parts would be returned to Kaman for sale on the open market. The Australian Government and Kaman would share in the profits of subsequent sales.

Under the agreement, the Australian Government will receive at least 50 per cent of the proceeds from any sale of the helicopters by Kaman with a guaranteed financial return from Kaman of $39.5 million. In addition a further $30 million worth of spares will be retained for use on the Seahawk and Black Hawk helicopter fleets.

Further, the Australian Government has saved $150 million that would otherwise have been spent on the Seasprite project that will now be available for use on other capability.

Minister for Defence Joel Fitzgibbon said that he was pleased that the early resolution that had been achieved by the Australian negotiating team removes the uncertainty surrounding the Seasprite project.

This is considered the best outcome for the Government as well as the personnel affected by the decision. The Government is assisting Kaman with the transition of their personnel in a sector that is short of qualified and experienced people.

Mr Fitzgibbon said, “The Government has taken the tough decision and acted decisively to achieve the necessary outcome without a protracted legal dispute, to ensure the nation’s security.

“A legal and financial framework to facilitate the agreement is in place that provides a reasonable return for the Australian taxpayer. We are determined to ensure that the Defence Force receives the capability it needs. We have learned some valuable lessons from this project that we can apply to better ensure the success of future projects, and make sure that taxpayers receive value for their money,” Mr Fitzgibbon said.

---