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'AUSTRALIA PAYS $700 MILLION FOR HELICOPTERS IT CAN'T USE AND WHICH ARE OUTDATED IN 3 YEARS ANYWAY - 27 FEB 2002'


11th September 2001
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FROM: http://www.abc.net.au/am/s491735.htm

$700mil for choppers that can't be used

AM - Wednesday, February 27, 2002 8:21

LINDA MOTTRAM: The Defence Department has admitted that it's paid $700 million for helicopters it can't use because of technical problems and which will be out of date in three years anyway.

The Super Sea Sprite choppers were supposed to be in the air by the middle of this year but software glitches mean that the earliest they'll be up and running is December 2004.

The Navy has already taken delivery of six of the helicopters but it's refusing to use them and while the choppers are on a flight to nowhere, the Commonwealth is still paying for them with another $800 million instalment due later this year.

From Canberra, Mark Willacy.

MARK WILLACY: For years the Coalition teased and tormented Labor over the hapless Collins Class Submarine but in politics what goes around comes around and just like the Collins Subs, the Government's purchase of eleven Super Sea Sprite helicopters has been delayed by technical problems and the problem with that is the delay is at least three years and the Government is already out of pocket $700 million, with another $84 million to be paid this year.

CHRIS EVANS: No Australian business who ran their business like that would stay in business for more than a couple of weeks.

MARK WILLACY: Labor's Defence spokesman, Chris Evans, teased the Super Sea Sprite revelations out of Defence Force officials at Senate Estimates Hearings.

While the Navy's already taken delivery of six of the choppers, it won't use them until it has confidence that the software control system is in place.

Labor's Chris Evans.

CHRIS EVANS: Well my main concern is that we've spent $800 million of taxpayers' money and got nothing to show for it. We paid over the money and we haven't got the helicopters and so yes there are doubts about the ongoing viability of the contract, but more importantly they've got taxpayers money that could have been used to fund schools, hospitals and aged care and we haven't got anything in return.

MARK WILLACY: That may be Chris Evans' main concern, but another worry is the failure of the Defence Department and the Minister, Robert Hill, to ensure the taxpayer is protected by a watertight contract.

CHRIS EVANS: Well I would have thought it was basic business practice to have a liquidation clause or something that protected your interests.

What the Defence and Minister Hill are saying to us is that there is no protections for the Australian taxpayer and that the $800 million has been handed over, we've got nothing in return and there's nothing we can do about it.

That is, in my view, disastrous contract management. It shows the lack of professionalism and I think a lack of political will from the Government to tackle these issues and make sure that we get better value for taxpayers' money.

MARK WILLACY: At Senate Estimates, the bureaucrat in the hot seat, the Under Secretary for Defence Material, Mick Roche, admitted things could have been done a whole lot better.

MICK ROCHE: Put bluntly Senator, the contract is not the sort of contract that we would wish to draw up these days.

The prime contractor has been left with a major sub-contractor who walked from a contract to deliver the mission control system but in the meantime the progress payment arrangements that were in the contract meant that we were legally obliged to pay as various progress points were reached.

LINDA MOTTRAM: Defence Department Under Secretary, Mick Roche. That report from Mark Willacy in Canberra.

FROM: http://www.abc.net.au/am/s491735.htm

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