SEASPRITE HELICOPTER AGREEMENT

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.

Media contacts:

Christian Taubenschlag (Joel Fitzgibbon):         02 6277 7800 or 0438 595 567

Defence Media Liaison:                                       02 6265 3343 or 0408 498 664