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CANADA CONFIRMS HELICOPTER FLEET REPLACEMENT

5 Dec 02. Canada will move quickly to replace its aging and accident-prone fleet of Sea King maritime helicopters by choosing a new line of fully equipped aircraft in 2004, Defence Minister John McCallum told Parliament on Thursday.

Much to the irritation of legislators and the military, the government of Prime Minister Jean Chretien has dragged its feet for years over replacing the 40-year-old Sea Kings amid accusations of political favouritism and dirty tricks.

The government had insisted for years on splitting the order into two tenders, one for the mainframe and one for the avionics. McCallum said there would now be one tender in a bid to save time.

“A top priority was to get the right helicopter at the lowest possible price as soon as possible,” he said. “Accordingly, today I have instructed my officials to proceed as soon as possible with a single tender for a fully equipped helicopter.” McCallum told reporters that he hoped to be able to announce the winning company in 2004.

When Canada launched its C$2.9bn ($1.9bn) bid to buy 28 new maritime helicopters in August 2000 it said it wanted to award the contracts for the basic aircraft early in 2001. By August last year that date had slipped to July 2002.

After Chretien came to power in 1993 he scrapped a C$4.8bn contract the outgoing Conservative government had signed for 50 all-purpose EH101 helicopters to replace the Sea Kings, arguing they were too expensive.

The Liberals split the purchase into two contracts for land-based search-and-rescue choppers and naval frigate-borne helicopters. In 1998 they bought 15 search-and-rescue Cormorant helicopters from the same Anglo-Italian consortium to which Ottawa had paid cancellation fees.

The government now appears desperate not to award the maritime helicopters to the same group, E.H. Industries Ltd., which is made up of Britain’s GKN Westland (London:GKN.L – News) and Italy’s Finmeccanica unit Agusta (Milan:SIFI.MI – News). Critics says the Cormorant is far more robust than the rival Cougar, made by the French-German-Spanish venture Eurocopter (Paris:EAD.PA – News; XETRA:EAD.DE – News; Madrid:EAD.MC – News). United Technologies Corp (NYSE:UTX – News) unit Sikorsky is also in the race. Ottawa purchased 41 Sea Kings in 1961 and since then 12 have crashed, killing eight people.

McCallum’s announcement comes three weeks after a Canadian Senate committee urged the government to boost its annual defense budget by around a third, or C$4bn, to prevent the armed forces from deteriorating beyond repair. Canada spent 1.1 percent of gross domestic product on defence in 2001 — among NATO members only Luxembourg spent less — while Britain spent 2.4 percent and the United States 3.0 percent. ($1=$1.56 Canadian)

Comment: The report that the EH101 is out of favour is at odds with a number of reports received by BATTLESPACE. At the time prior to the award of the BOWMAN contract some suggestions were made that a strong lobbying campaign by AgustaWestland with the DTI went some of the way in helping to secure the contract for CDC in Canada with offset requirements. Certainly a number of Canadian firms are geared up to supply equipment for the EH10 and it may be too early to write the aircraft chances off at this stage. Certainly Eurocopter expressed disquiet at losing last time with the Cougar and will be even more determined this time

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