Military cargo planes get Treasury Board approval
By Murray Brewster, THE CANADIAN PRESS
OTTAWA - The Defence Department's long-awaited and controversial purchase of the newest version of the Hercules transport plane has been approved by the federal Treasury Board, defence sources say.
A replacement for the air force's aging C-130E and C-130H fleets was first proposed in the summer of 2006 by former defence minister Gordon O'Connor.
Sources said the $4.6-billion purchase of 17 C-130Js received funding approval last Thursday, but a contract has yet to be signed with U.S. aircraft giant Lockheed Martin.
The in-service support portion of the deal will be the subject of further discussions, said one source familiar with the agreement.
Officials at National Defence declined comment, and it's unclear whether the federal cabinet needs to review the package again.
But in a year-end interview with The Canadian Press last week, Chief of Defence Staff Gen. Rick Hillier said he understood the cargo plane was in the final stages of approval.
Three of the older Hercules have already been retired after exceeding their flying life and "we'd like to put the other ones to bed as quickly as possible," Hillier said.
"With the old C-130s, we're spending more to keep them flying but their operational availability is going down."
He compared the existing fleet to a 1981 Ford Taurus that is constantly in the shop for repairs.
"You spend a thousand bucks to keep it running, take it back out and something else breaks and you put it back in," he said.
"I know this because I had a Ford Taurus."
Defence sources said the government was running out of time to make up its mind because Lockheed Martin's price for the project was set to expire at the end of the year.
Often described as the workhorse of the air force, Hercules transports have flown tens of thousands of soldiers into and out of Kandahar during the last two years. The cargo plane is also a principal resupply lifeline, dropping containers of ammunition, food and medical supplies to NATO combat units throughout southern Afghanistan.
The Defence Department refused to explain why in-service support for the C-130Js has been left open for discussion, but it is clear a storm is brewing among Canadian defence contractors, who increasingly feel left out.
As military aircraft become more sophisticated and fewer are being purchased, many Canadian aerospace firms have downsized and discontinued separate production lines. Instead they now rely on the Defence Department to buy maintenance data, such as technical drawings, up front from the aircraft-maker, most of which are foreign-owned.
The system has had problems, notably the purchase of the CH-149 Cormorant helicopter from AgustaWestland. Federal bureaucrats negotiated technology licences on a piece-by-piece basis, resulting in a part and maintenance nightmare for Halifax-based IMP Aerospace, which has the support contract.
Since the Conservatives announced sole-source deals with both Lockheed Martin and Boeing, there has been a change in practice. The government intends to contract in-service support directly with the aircraft-maker, but require them to spend money in Canada on industrial offsets - something that will generate work, but not to the same degree as the old system.
The Public Works Department has been working feverishly to persuade the skeptical aerospace industry of the merits of the new approach, but companies have demanded to see the terms in writing.
The purchase of new C-130s has also prompted a repeated storm of criticism over the way it was handled and the choice of aircraft itself.
The Conservative government decided early in its tenure that it was going to deal exclusively with Lockheed Martin for the air force's medium-lift transport planes.
Rival European aircraft-maker Airbus Military complained publicly and took the unusual step of putting its case before the House of Commons defence committee, saying its yet-to-be-tested cargo jet was being unfairly excluded from competition.
Concerns about the sole-sourcing arrangement were also fodder for opposition parties during question period.
Critics also pointed to a variety of teething pains, including problems with the cockpit glass, radar glitches and props that have been easily damaged by what's considered ordinary wear and tear.
http://cnews.canoe.ca/CNEWS/Canada/2007/12/19/4732582-cp.html
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