(Agencies)
Updated: 2008-03-06 10:00

CANBERRA -- Australia said Wednesday it canceled a contract to buy 11 navy Seasprite helicopters from US-based Kaman Corp, claiming the aircraft are unsafe.

Australian Defence Minister Joel Fitzgibbon is seen here in Canberra on February 23. Australia on Wednesday canceled a contract to buy 11 navy Seasprite helicopters from US-based Kaman Corp. [Agencies]

The cancellation came amid a review of defense contracts ordered since Prime Minister Kevin Rudd's new government came to power in elections last November. The contract was due to be completed by 2002 but has been plagued by technical problems and only nine helicopters have been delivered.

The Australian navy grounded the Seasprites in April 2006 because of safety concerns during test flights.

"The project had to be canceled on safety grounds alone," Defense Minister Joel Fitzgibbon told reporters, despite Australia already investing 1.3 billion Australian dollars (US$1.2 billion; euro792 million) in the deal.

"The airworthiness and crash worthiness of the aircraft was not up to 21st century standards and it was pretty clear the capability was not likely to be delivered in full," Fitzgibbon said.

A spokesman for Kaman, a manufacturer based in Bloomfield in the US state of Connecticut, was not immediately available at the company headquarters to comment on the safety issues.

Kaman's Chairman, President and Chief Executive Officer Neal Keating said in a statement earlier Wednesday that his company would try to negotiate a mutually agreeable conclusion to the contract.

"Although we have created a highly capable aircraft for the Royal Australian Navy and continue to fulfill our obligations to the Commonwealth under our contract, we appreciate the thoughtful approach and time invested by the current Government in addressing our program and we will work with them toward arriving at a satisfactory arrangement," Keating said.

Defense officials told an Australian Senate committee last month that the helicopters were still three years from service and might never meet aviation safety standards.

Neil James, executive director of the Australian Defense Association independent think tank, said navy air crews were "not comfortable flying it in all conditions" and would be relieved the helicopter was scrapped.

Its problems included the amount of modern technology the manufacturers attempted to integrate into a 1960s-era airframe, James said.

Fitzgibbon did not say how much it would cost the government to break the contract, as legal and financial arrangements have yet to be negotiated with Kaman.

"The government will announce the details of arrangements with the contractor once mutual agreement on these matters has been reached, subject to any confidentiality issues," Fitzgibbon said in the statement.

What happens to the nine helicopters already in Australia's possession will be a matter for negotiation, said Defense Ministry spokesman Christian Taubenschlag.

Opposition defense spokesman Nick Minchin agreed with the government's decision to scrap the contract, but questioned how much the cancellation would cost and how the naval air capability would be replaced.

Minchin said his government had considered abandoning the contract months before the election last year, but had decided to give Kaman a final chance.

The new government has also been critical of its predecessor's decision a year ago to sign a A$6 billion (US$4.6 billion; euro3.5 billion) contract to buy 24 F/A-18 Super Hornet fighters from Boeing in the United States.

Fitzgibbon has said he will also cancel that contract if a review next month reports that the jet is not the best for Australia's needs.