PETER LA FRANCHI / MELBOURNE
Canberra says Eurocopter failed to meet contractual obligations, but deliveries not hit
The Australian Department of Defence is withholding A$153million ($90 million) from Eurocopter because the company is failing to meet contracted deliverables on the Australian Army's Air 87 armed reconnaissance helicopter programme. Eurocopter was selected in 2001 to supply 22 Tigers.
Australian defence minister Robert Hill says the project is experiencing "issues around the edges" but says the unspecified problems are not expected to affect first aircraft deliveries in December 2004.
Eurocopter deputy chairman Fabrice Bregier says the withholding of payments is a minor issue linked to the preparation of technical documentation for the purchase.
Speaking at the Australian International Airshow last week, Bregier said the issue has already been resolved with the Australian defence department. "At the end of last year it is true that some documentation was considered incomplete by the customer. So we had reviews early this year."
Bregier adds that discussions took place with the Australian defence department at the air show on 11 February. "They were very comfortable with the actions taken and in place to catch up. It is a matter of weeks apart on documentation...nothing which would endanger the in-service date."
Bregier says: "I think this is natural to wait until we correct some deliveries before getting paid."
Australian government budget papers released in December reveal that up to A$176 million was to have been spent on the programme during this financial year, but this had been cut to A$23 million by late November. The papers state that the "significant reduction" in Air 87 expenditure is "because the contractor is not meeting the Commonwealth's full expectations in contracted deliverables. The project is expected to regain its contracted schedule by the end of 2003."
The project is cost-capped at A$1.88 billion, with A$124 million spent by late 2002. Eurocopter is required to deliver two aircraft in December next year with the remainder to follow by April 2008.
Eurocopter says it will start local assembly of aircraft 5-22 at its new Brisbane facility in April this year.
Source: Flight International
