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Australia Cancels Seasprite Contract

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Australia cancels contract to buy 11 navy Seasprite helicopters from US


The Associated PressPublished: March 5, 2008



CANBERRA, Australia: Australia has canceled a 1.3 billion Australian dollar

(US$1.2 billion; €792 million) contract to buy 11 navy Seasprite helicopters

from U.S.-based Kaman Corp., the government announced Wednesday.

The cancellation came amid a review of defense contracts ordered since Prime

Minister Kevin Rudd's new government came to power in elections last

November. The contract was due to be completed by 2002 but has been plagued

by problems.

Defense Minister Joel Fitzgibbon announced the cancellation in a statement.

He did not say how much breaking the contract would cost the government, as

legal and financial arrangements have yet to be negotiated with Kaman, a

manufacturer based in Bloomfield in the U.S. state of Connecticut.

"The government will announce the details of arrangements with the

contractor once mutual agreement on these matters has been reached, subject

to any confidentiality issues," Fitzgibbon said in the statement. Fitzgibbon

later told reporters the helicopter is unsafe.


"The project had to be canceled on safety grounds alone," he said. "The

airworthiness and crash worthiness of the aircraft was not up to 21st

century standards and it was pretty clear the capability was not likely to

be delivered in full."

Australia has already invested A$1.3 billion (US$1.2 billion; €792 million)

in the deal, he said without elaborating.

Australia had already provisionally accepted nine of the 11 helicopters, the

Defense Department's Web site said. Officials said the craft were unable to

perform as promised, however.

What happens to the nine helicopters already in Australia's possession will

be a matter for negotiation, said Defense Ministry spokesman Christian


Kaman's Chairman, President and Chief Executive Officer Neal Keating said in

a statement that his company would try to negotiate a mutually agreeable

conclusion to the contract.

"Although we have created a highly capable aircraft for the Royal Australian

Navy and continue to fulfill our obligations to the Commonwealth under our

contract, we appreciate the thoughtful approach and time invested by the

current Government in addressing our program and we will work with them

toward arriving at a satisfactory arrangement," Keating said in a statement.

Neil James, executive director of the Australian Defense Association

independent think tank, said navy air crews were "not comfortable flying it

in all conditions" and would be relieved the helicopter was scrapped.

One of its flaws was the difficulty in integrating modern technology with

its 1960s-era airframe, James said.

Opposition defense spokesman Nick Minchin agreed with the government's

decision to scrap the contract, but questioned how much the cancellation

would cost and how the naval air capability would be replaced.

Minchin said his government had considered abandoning the contract months

before the election last year, but had decided to give Kaman a final chance.

The new government has also been critical of its predecessor's decision a

year ago to sign a A$6 billion (US$4.6 billion; €3.5 billion) contract to

buy 24 F/A-18 Super Hornet fighters from Boeing in the United States.

Fitzgibbon has said he will also cancel that contract if a review next month

reports that the jet is not the best for Australia's needs.

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