Budget woes force DND to look at fewer battlefield helicopters: sourcesOTTAWA — The Defence Department wants to trim its order for new battlefield helicopters as it struggles to keep the $4.7-billion program within budget, The Canadian Press has learned.
Federal officials have asked U.S. aircraft giant Boeing whether the order for 16 heavy-lift CH-47F Chinooks can be cut to 14, say defence sources.
The top-of-the-line Chinooks were initially promised in 2006 by the Conservative government. But the project is now years behind schedule and is still considered in the "definition phase" - meaning it is the subject of negotiations between the company and the federal government.
"We're close" to a contract, said a defence insider, who spoke on condition of anonymity.
A National Defence spokeswoman refused to discuss proposals being exchanged with the Chicago-based corporation, but stressed the federal government is still committed to the project.
"The government is currently negotiating with Boeing on the details of the contract and therefore cannot comment on the particulars of the contract at this time," said Annie Arcand.
"However, I can say that once a contract is finalized it will meet the statement of operational requirements for the (medium-heavy-lift helicopter) and will provide excellent capability to the Canadian Forces."
A spokesman for Boeing declined comment.
The contract, under negotiation for a year, was supposed to be signed at the end of 2008.
The program went off track when the air force began tinkering with the specifications only months after the plan was announced with fanfare in June 2006 by former defence minister Gordon O'Connor.
Military planners wanted a robust aircraft, one capable of fulfilling a variety of missions and only the 'F' model - the latest variant of the hardy CH-47 - would do.
The initial delivery date was supposed to be 2010, but last year defence officials conceded that it had slipped to late 2011 and could now be pushed out to 2012 - or beyond.
Defence sources said talks with Boeing, which was pegged for the sole-source contract almost from the outset, also bogged down over the issue of industrial regional benefits - that is, giving Canadian aerospace companies a piece of the pie.
Chinooks are built at a plant in Philadelphia.
Earlier this year, a senior defence official, in a background interview, tried to smooth over the disagreement by saying industrial benefits "was not a show stopper."
But costs have risen since the initial proposal and statement of requirements was drafted in June 2006, putting in danger the project's budget at a time when the recession has plunged the federal treasury into a multibillion-dollar deficit.
Last year, work on the navy's joint support ship program was halted when bids from the shipbuilding industry exceeded the planned budget.
Some skeptics within government have asked why the air force still needs heavy-lift helicopters when six used CH-47D Chinooks were purchased from the U.S. Army for the Afghan mission.
The Defence Department's own 2009-10 budget estimates refer to "possible plans to acquire a medium-to heavy-lift helicopter capability."
In drawing up a statement of requirement for its battlefield helicopter, the air force said it needed a minimum fleet of 16 aircraft flown out of two bases in Canada.
That goal could still be met with fewer new helicopters, but some the existing "D" model aircraft would have to upgraded.
Another sign that federal government is scrambling to save the programs came recently in documents obtained by the Bloc Quebecois. The reports suggested the air force had proposed to centralize Chinook flight operations out of one air strip - Canadian Forces Base Petawawa, Ont. - in order to cut costs.
Copyright © 2009 The Canadian Press. All rights reserved.
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