Australia's new Labor government is due to start negotiations on legal and financial issues with Kaman Aerospace on 10 March, after announcing that it is to cancel its troubled SH-2G(A) Super Seasprite helicopter programme.
The government says it will look to improve the operational availability of the Royal Australian Navy's Sikorsky S-70B Seahawks, which have an inferior surveillance capability, but declines to provide further details.
Australia has so far spent A$950 million ($890 million) on its 11-aircraft Super Seasprite programme, which is already seven years late and was not expected to deliver full functionality until 2010-11.
The programme has faced numerous problems, mainly involving the aircraft's Integrated Tactical Avionics System. Nine helicopters currently in Australia have been grounded since May 2006 following an automatic flight-control system problem, but had been expected to be airborne again this year.
The government last week declined to comment on how much it expects to pay to exit the project, but it will require another billion-dollar replacement order to provide the navy's Anzac frigates with a surface surveillance and attack capability. It will also look at replacement options for the Seahawk during a Defence White Paper study this year, with these possibly to include additional NH Industries' MRH90s, 46 of which are already on order for the RAN and the Australian army.
Defence minister Joel Fitzgibbon says the government was left with little option but to cancel the Super Seasprite deal, describing it as part of "the long list of defence capability nightmares" it had inherited from the previous government. Former defence minister Brendan Nelson is believed to have favoured cancelling the programme following a review last year, but a looming election, the amount of money already spent, possible legal action by Kaman and a lack of suitable alternatives resulted in a reprieve.
Kaman maintains it has met its obligations and responsibilities, and has created "a highly capable aircraft". Chairman Neal Keating says the company will work with the Australian government "toward arriving at a satisfactory arrangement".