27feb02

THE federal opposition has accused the Defence Department of incompetence for paying hundreds of millions of dollars for helicopters which will be delivered more than three years late.

"No Australian business who ran their business like that would stay in business for more than a couple of weeks," opposition defence spokesman Chris Evans told ABC radio.

During Senate estimates hearings last week, it was revealed the government would have paid 80 per cent of the $1 billion contract to the Kaman Aerospace International Corporation by the end of this year.

However the Super Seasprite choppers would not be flying until the end of 2004 due to delays caused by the withdrawal from the project of the company responsible for the helicopters' software systems.

The only remedial action available to the government is to sue for breach of contract because the contract did not contain a liquidated damages clause.

"Put bluntly, the contract is not the sort of contract we would wish to draw up these days," acting Defence Department secretary Mick Roche told the Senate hearing.

Senator Evans said his biggest concern was that taxpayers had spent $800 million and had nothing to show for it.

"We paid over the money and we haven't got the helicopters," Senator Evans said.

"Yes, there are doubts about the ongoing viability of the contract but more importantly they've got taxpayers money that could have been used to fund schools, hospitals and aged care and we haven't got anything in return."

Senator Evans said he believed it would have been basic business practice to have a liquidation or similar clause in the contract as protection.

"(It shows) a lack of political will from the government to tackle these issues and make sure we get better value for taxpayers money," he said