Ottawa, Sikorsky in ‘advanced stages’ of talks on troubled Cyclone program

by Murray Brewster, The Canadian Press

OTTAWA – The Harper government appears to have cooled on the idea of scrapping the purchase of the air force’s CH-148 Cyclone helicopters and is back in talks with the manufacturer to salvage the troubled $5.7-billion program.

The plan to acquire 28 maritime choppers to replace Canada’s 50-year-old CH-124 Sea Kings — which fly from the decks of Canadian warships — is years behind schedule, billions of dollars over budget, and apparently beset with technical glitches.

Earlier this fall, the Department of Public Works indicated it was looking at other aircraft because Cyclone manufacturer Sikorsky had only delivered four test aircraft, which National Defence has refused to formally accept.

Louis Chenevert, the chairman of United Technologies Corp., the owners of Sikorsky, told analysts in a conference call on Thursday that the company is having “productive discussions with the Canadian government” on the Cyclone program and that the talks are in the “advanced stages.”

Public Works Minister Diane Finley conceded the government “is in discussions” with Sikorsky to see if they can put together a plan to go forward.

Precisely what that entails, however, remains unclear.

“We are working. We had a third party come together and put a report together,” Finley said Friday at an event to announce the purchase of hard-top military shelters.

Last spring, Finley’s predecessor, Rona Ambrose, asked for an independent analysis of whether Sikorsky could deliver what it promised, and Finley says those recommendations are guiding the discussions.

The report suggested the government had 90 days from when it received the analysis to salvage the program, which was criticized by the auditor general a few years ago for being misrepresented as an off-the-shelf purchase rather than a development contract.

Finley’s officials asked Sikorsky’s rivals in October for detailed information, pricing, and potential delivery dates should the Conservative government cancel the existing contract.

AgustaWestland, which is marketing its HM-1 Merlin helicopter, and NH Industries, representing Eurocopter and the NH-90 chopper, both responded. Sikorsky was also asked for information about its other maritime helicopter, the MH-60 Sea Hawk, which is in service with the U.S. Navy.

Chenevert, however, said Thursday that his company intends to deliver eight helicopters this year, followed by eight more each in 2014 and 2015.

“The airplane is flying, people are training,” said Chenevert, who offered up photos of the training effort, which is taking place at a military base in Shearwater, N.S.

“Obviously, it is binary. I mean, if everything gets resolved, eight get delivered; if not, they move into next year and we know exactly what the math will be, but at this point in time, we’re planning eight, eight, and eight.”

Throughout most of 2013, the government and Sikorsky have been engaged in a public tug-of-war over when a final version of the helicopter would be ready for service, despite two contract extensions and more money for engine improvements.

There have been ongoing technical concerns that prompted the air force’s directorate of flight safety to issue a restricted flight certificate. Some of those worries involved whether the helicopter’s sensitive electronics were sufficiently shielded to prevent electro-magnetic interference.

Internal documents viewed by The Canadian Press earlier this year revealed that air force evaluators warned nearly a decade ago that the Cyclone might not measure up in terms of engine performance, acoustic noise and its ability to resist electronic interference.

The purchase was nonetheless allowed to proceed.

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