In the Dominion Press this Morning http://www.stuff.co.nz/stuff/dominio...3a6000,00.html
This really takes the cake...
New helicopter bought for parts
24 November 2006
By HANK SCHOUTEN
The Defence Ministry has confirmed it will spend $80 million on a new NH90 military helicopter - then strip it to provide spare parts.
The ministry had announced plans to buy eight of the French-built choppers.
It decided to buy a ninth because it worked out about $10 million cheaper than buying the equivalent number of spare parts.
Helicopter project director Kevin McMahon told Parliament's foreign affairs and defence select committee yesterday that buying a ninth chopper was similar to insurance companies buying cars and stripping them for parts because it was cheaper than buying parts separately.
The extra helicopter would also allow the Air Force to acquire a spare air frame and other parts which it would not otherwise buy as spares.
Mr McMahon said the price New Zealand was paying for each of its helicopters was comparable to that being paid by Australia for its 46 NH90s, though the contracts were configured differently.
Australia had not gone for a fixed-price contract, whereas the New Zealand Government had insisted on it and paid a premium for it.
AdvertisementAdvertisementNew Zealand had also had to pay the cost of its risk-averse foreign exchange hedging policy.
Defence Ministry acting secretary Chris Seed was asked by National MP Murray McCully to explain how the helicopter replacement project, initially estimated to cost $400 million to $560 million, had ended up costing $900 million.
Mr Seed said the estimate was made more than four years ago after consulting manufacturers of military helicopters but the NH90 was not in production then.
The increase in the helicopters' price reflected advances in technology, military inflation and the small number of manufacturers operating in the sector.
The ministry was now modifying its process for calculating estimates.
Mr Seed added that New Zealand decided to have its NH90s built by Eurocopter in France, rather than assembled in Brisbane, because they could be more certain about price and delivery times.
Getting capable helicopters that were similar to Australia's new military helicopters was more important than where they were being built, Mr Seed said.