The Government is close to finalising a deal that would put the delayed upgrade of Air Force C130 Hercules aircraft back on track and in its own hands.
US firm L-3 Communications has been tasked with the upgrades, which are still not complete despite the $226 million contract being ticked off more than five years ago. While the Air Force has had two planes back, equipment and contractual problems have dogged the project and three aircraft are yet to be upgraded to the standards expected.
Air NZ subsidiary Safe Air was sub-contracted to do some of the work, but with aircraft not being sent to its Blenheim base from the US when expected it led to lay-offs and continued difficulties for the Air Force.
The Ministry of Defence was reported yesterday to be in advanced discussions with L-3 about getting the Government to take over the contract. That involved agreeing on the amount of money which should be deducted from the original contract price and the ministry hoped such details would be ironed out and work on the three aircraft could continue in New Zealand next year.
Defence Minister Wayne Mapp said the Air Force had been forced to juggle its operations to skirt around the problem.