Other Questions. - Air Corps Helicopters.

Joe Sherlock

Ceist:

68 Mr. Sherlock asked the Minister for Defence when it is intended to acquire medium lift helicopters, following the cancellation of the order in 2002 and in view of the clear need for appropriate aircraft to allow the Air Corps to carry out their duties; and if he will make a statement on the matter. [18763/03]

Dinny McGinley

Ceist:

72 Mr. McGinley asked the Minister for Defence the position regarding the provision of medium range helicopters for the Air Corps; and if he will make a statement on the matter. [18876/03]

Thomas P. Broughan

Ceist:

106 Mr. Broughan asked the Minister for Defence when he expects to receive the report of the interdepartmental working group to seek alternative solutions to the provision of funding for helicopters required by the Air Corps; and if he will make a statement on the matter. [18764/03]

I propose to take Questions Nos. 68, 72 and 106 together.

The decision to cancel the tender competition for the acquisition of the medium lift helicopters for the Air Corps in July 2002 was taken due to budgetary constraints which meant that the level of defence expenditure had to be reduced. Any decision to acquire medium lift helicopters for the Air Corps in the future can only be taken as the financial resources permit. The decision to cancel the tender competition was an extremely difficult one for me. I am also aware of the acute disappointment felt by the Air Corps personnel when the decision was announced.

However, having consulted the military authorities on the matter at that time, the main priority outlined for the Air Corps was the purchase of fixed-wing trainer aircraft to ensure that cadets continued to be commissioned, trained as pilots and retained in the Air Corps. In that regard, I was delighted to sign a contract with Pilatus of Switzerland in January 2003 for the supply of eight turbo propeller training aircraft which will be delivered in 2004. The value of the contract, including VAT, is around €60 million. These aircraft are a tangible response to the needs of the Air Corps at this time.

When the decision to cancel the tender competition was made, I asked my officials to initiate a review of the provision of helicopter services in conjunction with the Department of Communications, Marine and Natural Resources to determine how best to meet the State's obligations in search and rescue while taking account of the current financial position.

An interdepartmental working group was established to examine and consider alternative solutions to the funding issue, such as public private partnerships, with a view to providing medium lift helicopters for the Air Corps by other means. The public private partnership unit in the Department of Finance was also involved in assisting the working group in identifying and assessing possible solutions. In parallel with this, a joint military-civil board was established to review the overall rotary wing requirements for the Air Corps, in particular, the possible procurement of modern light utility helicopters for the Air Corps to replace its current fleet of Allouettes and Gazelles.

Obviously, the procurement of light utility helicopters raises similar issues regarding funding options. Having regard to the need to prioritise asset requirements in the context of available resources, the advice of the working group on funding has been incorporated into the report of the joint civil military board on rotary wing requirements, which deals with both search and rescue and light utility helicopters. This report has been completed by the board and is currently the subject of detailed consideration by senior civil and military management in my Department. I expect the report to be submitted to me in due course.

As the Deputy will appreciate, replacing the rotary aircraft of the Air Corps with modern aircraft would involve significant cost and can only be considered on the basis of prioritised requirements, having regard to available resources. I am committed to maintaining the Air Corps' role in the provision of SAR services, and to this end, the S61 helicopter is being acquired for the Air Corps to operate in the north-west region as a replacement for the Dauphin helicopter. The S61 is being leased by the Irish Coast Guard from CHCI pursuant to existing SAR contracts and has been tasked by the Irish Coast Guard to the Air Corps.

The Air Corps is providing the flight crews and the aircraft is being maintained by CHCI. All of the costs of this operation are being met from my Department's Vote. The S61 will operate out of Sligo Airport, where training is currently on-going. It is expected that the helicopter will go operational for daylight hours this month, with a full 24-hour service operational from October 2003.

It is almost a year since members of the Air Corps received the shocking news that the long-promised and badly-needed medium lift helicopters had been cancelled. At the time, the message was given by the Minister that it was only a temporary decision due to emerging financial difficulties. We were told that the alternative options would be explored. A year on, we are no closer to a decision. How many times has this interdepartmental group met? What was the last occasion on which it met, and what was the decision, in plain language, on this question?

It was equally disappointing for me that I could not proceed with that particular development. Having consulted with the Air Corps, it gave me what I understood to be a new priority at the time – the trainer aircraft. I was in a position in January to sign the contract for eight trainer aircraft, which will be delivered between March and June of 2004 at a cost of €60 million. That was the priority that was given to me by the Air Corps.

The work of the working group on the options open to me for the acquisition of helicopters is on-going, and I expect to have a report fairly soon. I can give the Deputy the details he has requested by way of letter as I cannot provide them off the top of my head now. An extensive study is being conducted on the alternative methods that could be put in place.

However, we are in a changed financial circumstance. I have tried to equip the Air Corps and improve Baldonnel by making a significant investment not just in aircraft but also in the accommodation hangar and other developments. We have been trying to do that in the last few years mainly through the sale of properties surplus to our requirements. It is not easy, however, and in the present financial circumstances I do not want to get into commitments which I do not see any way of fulfilling at present. The S61 is going to cost about €16 million over a three-year period, so dealing with that, maintaining search and rescue in the north-west, purchasing the trainer aircraft and continuing to improve facilities at Baldonnel are very significant investments that are without parallel in any previous Administration.

I do not want to raise hopes too high as to what more I will be able to do in the immediate future because of the significantly changed financial situation, the tightness with which Estimates have to be done and the limitations that may be in front of me in terms of the possibilities for sale of additional properties.

It does not stop the Minister buying the jet.

Is the Minister telling the Air Corps that there is little likelihood of the helicopters being supplied? Can this be attributed, in some respects, to the fact that the Government's vanity project of new ministerial jets is being provided for? Are there any plans to privatise parts of the air sea rescue services dealing with the maintenance of helicopters?

The maintenance of the S61 is being done by CHCI. As the Deputy knows, a considerable amount of the search and rescue services is being conducted by private services. I want to maintain, as far as I can, the Air Corps' stronghold in this area. That is one of the reasons I was involved in such a significant investment in the S61 for the north-west. That will continue as far as I can possibly do it.

It has now become clear that the new financial situation and constraints will apply specifically to the helicopter project for the Defence Forces but will obviously not apply to the replacement of the Government's own air fleet – the twin jet project. Has provision been made in the Estimates, alongside the considerations that might be given to the twin jet project, for a recovery of the project to supply helicopters to the Air Corps, having particular regard to the capabilities of the helicopters and the obvious need to upgrade and update the helicopter unit on an ongoing basis? Is it possible to enter into financial negotiations with those who are in the business of supplying such helicopters to do so on the same basis as is likely to apply in the case of the Government jets?

I should have mentioned this in the context of my reply to Deputy Sherlock, but one should not underestimate the work of the Air Corps in terms of ministerial transport. Those, like Deputies Durkan and Hogan, who have had the opportunity to serve in Government will be fully aware of its engagement in the provision of the MATS transport service to the Government, which is extremely busy, constant and involves considerable training in the initial stages and significant opportunities for the Air Corps.

All of the possibilities with regard to the acquisition of helicopters are being explored, but I would face difficulties in terms of meeting all of the requirements at the one time. The building of the hangar, the other work that has taken place on the helicopter wing, the purchase of the trainer aircraft and the purchase of the additional ministerial jets and the S61 for the north-west have involved very substantial expenditure and have given a massive boost to the Air Corps.

One must consider that very little had been purchased for the Air Corps and that Baldonnel was very run down when I became Minister. I undertook to tackle all of these problems as best I could. To do all of that in the one era is not possible, and I do not want to hold out the hope that I can do it all contemporaneously.

In terms of priority, does the Minister agree that these helicopters are far more important than Government jets? Does he agree that what is required is some lateral thinking in order that expenditure could be saved on the purchase of Government jets, if such jets were leased? Can the Minister explain why he previously made a statement that it would be preferable to purchase rather than to lease when according to the figures I have been given, savings to the Exchequer of up to 65% could be made if we entered some sort of timeshare arrangement? Will the Minister agree to examine this matter to ascertain whether we can save money in one area in order that we can prioritise other areas?

The Deputy appears to have slightly misunderstood what I said earlier. Generally speaking, nine times out of ten or 99 times out of 100, it is best to be in a position to make an outright purchase, to pay down the full amount when buying a significant item. This does not only apply to aircraft but to other large purchases. I did not say I was in a position to do that; I said that if one were, it would generally be the preferred option. Once one transfers into future payments, one is caught up with interest payments accruing. There are few circumstances where it could be proved that such an option does not cost more money in the long run. I have examined many options where such an option ultimately costs one more money. Assuming that one may have to go down that road because of financial constraints, that option is being examined. With the changed financial circumstances in which I have to operate, I do not want to get into the business of saying that I can get trainer aircraft which will cost €60 million and which will be delivered between next March and June; that I can continue the investment programme in Baldonnel, the cost of which is running up to €14 million or €15 million; that I can acquire the jets; and that all of this can be achieved in a short number of years when one considers the backdrop of what was not done in the past and what may have to be left undone for the future. I do not want to get into further commitments until I know exactly what I am in a position to do.