Australia announced March 5 it will cancel the U.S. Kaman Corp. [KAMN] -produced Seasprite helicopter project, two aircraft short of completing an order for 11.
The Rudd Labor government initiated a review of the project in late 2007 fulfilling pre-election campaign promises. The government had already invested $1.2 billion in the project.
Minister for Defence Joel Fitzgibbon told reporters, “The project had to be canceled on safety grounds alone.”
Nine of 11 helicopters have been delivered but there have been safety concerns about the aircraft, which were grounded in 2006 over such concerns during testing.
Discussions will be commenced immediately with the contractor in relation to the legal and financial arrangements to facilitate this. Australia will announce details of arrangements with the contractor once mutual agreement has been reached, subject to any confidentiality issues, the government said in a statement.
Fitzgibbon said the decision was not one taken easily, but the Government was left with little option.
The 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,” 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,” Fitzgibbon said.
The government’s interim approach will be to focus on improving the operational availability of the current Seahawk fleet. Additionally, the government will investigate the planned replacement of the Seahawk during its White Paper deliberations.
“The new Government will continue to work through the long list of Defence capability nightmares it has inherited from the former government,” Fitzgibbon said. ” We are determined to ensure that the Defence Force receives the capability it needs, and Australian taxpayers receive value for their money.”