$770m helicopter deal good value, says Government

The NH90 deal is the biggest Defence Force purchase since the 1980s.

The New Zealand Air Force has a new workhorse, with the Government yesterday signing a deal to buy eight NH90 helicopters.

Defence Minister Phil Goff said the Government had committed $771 million to buying the top-of-the-range aircraft which were expected to be in service for at least 30 years.

They will replace the Air Force's decaying fleet of 14 Iroquois helicopters, which have been in service for more than 40 years.

The deal is the biggest single defence purchase since the agreement in the 1980s to buy the new frigates Te Kaha and Te Mana.

The first of the NH90s will arrive in New Zealand in 2010, and the fleet will come into full service by 2013.

While the Air Force will have fewer helicopters, the new aircraft will be better and more versatile than the Iroquois, Mr Goff said.

He believed the eight new helicopters would be enough to meet all requirements.

The NH90 has been bought by several European countries, and Australia has ordered 46 of them. Built by Nato Helicopter Industries, the machine is a modern medium-sized helicopter which can operate from land or from naval vessels.

The Government has planned to buy new medium-sized helicopters for some time, and in 2002 estimated it would cost taxpayers up to $560 million. Mr Goff said the 2002 price had been "just that, an estimate", and defended the $50 million to $60 million cost per aircraft as being good value for a state-of-the-art helicopter.

"The cost of the aircraft will be met out of the $3.3 billion long-term development plan. They will be able to be met out of existing funding, but clearly the operational funding will be tight by the end of the 10-year period."

New Zealand had expressed interest in the NH90 before the helicopter had gone into production, Mr Goff said.

Since then the cost of military hardware had increased and the value of the New Zealand dollar had decreased, which had hiked the cost.

"The cost of the helicopters includes the full costs of the logistics, of the spares, of the software, of the training," Mr Goff said.

"They are expensive, but they will be the mainstay of our Defence Force for the next 30 years. Therefore I believe that it's an important and valuable investment to make.

"The aircraft will be used for military deployment and have a much greater capacity to do that effectively on the battlefield. They will be essential for the peacekeeping functions that are a critical part of what the New Zealand Defence Force does internationally."

However, National Party defence spokesman Murray McCully condemned the cost as a blowout worthy of making the Guinness Book of World Records.

"Labour has dithered for so long that the cost has ballooned well beyond what was envisaged in Labour's much-hyped Long Term Development Plan. Replacing the Iroquois and Sioux helicopters had a budget provision in the plan of between $400 million and $561 million.

"Now we hear the cost will be $771 million, just to replace the Iroquois. Adding a replacement for the Sioux trainers could well boost the cost even closer to the billion mark."

Mr Goff said he was yet to seek Cabinet approval to buy six small and training helicopters, machines which would cost "probably less than a couple of the NH90s".