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Thursday July 27, 2000

Canada eyes helicopter, transport plane purchases

OTTAWA, Canada ( Reuters ) - Canada is eyeing C$2 billion ($1.4 billion) worth of maritime helicopters and the same value of military transport planes, the latter possibly as a joint purchase with the United States.

Prime Minister Jean Chretien said on Thursday a call for bids would be made soon for the helicopters, which would replace an ageing fleet of Sea Kings that have increasingly been falling from the sky.

``There will be an announcement, but not today...not this week,'' he told reporters after a cabinet meeting.

Buying six C-17s, with service, could cost C$2 billion, a large chunk of a defence budget currently set for C$9.4 billion.
``If you buy these aircraft and they're not used all the time, it's better to find a plan whereby they can be used by someone else,'' Eggleton said.
``That way it costs less. But we want to make sure that our requirements are met, and that may or may not be the case.''
One consideration is whether Canada would get first call on the C-17s, made by Boeing Co., in the event of a crisis requiring both countries' forces.
``If we couldn't get them when we wanted them, there wouldn't be any point to them. And there may not be any point to this... It's just in exploratory stages.''
Canada commits to peacekeeping operations around the world but often has to rely either on the United States military or on commercial companies to ferry its troops and equipment.
It currently has a shipload of army vehicles held on the high seas in a commercial dispute between U.S. and Canadian firms.

On the helicopter issue, Conservative Member of Parliament Elsie Wayne said it was a ``disgrace'' that Chretien, a Liberal, still had not made a decision.

``The prime minister should realise that he is putting the lives of those who operate the Sea Kings in jeopardy, and that Canadians will no longer accept these unnecessary risks,'' she said in a statement.

Chretien made helicopters a major campaign issue in his 1993 election campaign, when he promised to cancel a Conservative contract to buy C$4.8 billion of choppers that could be used in maritime or in land-based search-and-rescue operations.

The Liberal government had to pay C$478 million to cancel the contract for 50 helicopters -- and then turned around and bought 15 search-and-rescue choppers in 1998 from the same Agusta-Westland consortium in a C$790 million deal.

The consortium comprises the Westland unit of Britain's GKN Plc and the Agusta business of Italy's Finmeccanica SpA , along with Canada's Bombardier Inc.

The group would likely have an edge on bidding for the naval helicopters since it would be able to benefit from economies of scale, though the military insists the bidding would be open to all.

Some of the Sea Kings date back to the 1960s. One of them sank in the Pacific off Hawaii last month, and operations were so unreliable in East Timor last December that the Canadian chief of defence staff was flown around in a more modern Australian chopper.

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