Thursday, April 20, 2017

If the NH90 is so great why doesn't treasury see what other governments will pay for them?

The NH90 reliability disease has struck again this time with the New Zealand Defence Force joining the rest of the NH90 customer base in restricting flying because of a recent turbine failure. Air Vice Marshal Tony Davies not surprisingly defended these vastly expensive war toys for being better than their thirty year old predecessors and providing services in disaster area - neglecting to add at a cost that would make them uneconomic if the decsion was left to the market.

To have the faulty machine looked at it has had to be flown to Sydney, which will be expensive as only a RAAF C-17 Globemaster (or its Russian equivalent) could carry one without it being largely disassembled.

The NH-90 has been restricted or grounded in Germany, Australia, Sweden, Finland and just about everywhere else they have been bought. The Rolls-Royce Turbomeca RTM322 engine used in both the Australian and New Zealand machines has not proven to be particularly reliable. Seven years ago the Australians had serious problems with them, grounding machines and inspecting them after every five flying hours. The Finnish machines (which were bought for a fraction of the price New Zealand paid) were down to 19% availability due to mechanical failings.

While the Air Force is never going to admit that it has essentially wasted public money on the NH90s (despite numerous critical reports from the Audit Office) the performance of these machines has underwhelmed Ministers and commentators from the outset. Before more funding is granted to upgrade them to make up for deficiencies that were obvious when they were purchased I believe the Treasury should take a long hard look at the value of the Air Force's helicopter operations.
I am, personally, firmly of the view that No.3 Squadron is a vast waste of public money and should be disbanded. Why? Because No.3 Squadron does not do anything that that the huge range of civilian helicopter contractors in this country could not do. It carries people and stuff around New Zealand and for that it charges taxpayers $200 million. Taxpayers would get much better value from a civilian firm - at about a third of the cost. Civilian firms can and have deployed to more dangerous and difficult to reach places than No.3 Squadron ever has.

That said I am equally firmly of the view that No.6 Squadron (Naval helicopters) should be expanded and upgraded. The Seasprites do do things that civilian contractors cannot do. They are armed with missiles, torpedos and automatic weapons. They are built for operating at sea (which the RNZAF TTH NH90s are not) and they are readily deployed without relying on gigantic cargo aircraft we can't afford.

The Australian Navy replaced their Seasprites with the American MH-60R Seahawk naval helicopter which, in my view again, is an excellent start. The Seahawk is reliable, easily redeployed, fast and deadly. While I do not see any need for a submarine hunting capability (there being a global shortage of potential target submarines) the very similar MH-60S Knighthawk which is designed for search and rescue, mine hunting, and can be armed with torpedos, Hellfire missiles and machine guns. With a bigger cabin than the Seasprite and the same lifting ability as the NH-90 the MH-60S Knighthawk can also be airlifted by a C-130 sized transport aircraft.  This aircraft would make up for all the shortcomings of the NH-90.

There is no immediate need to replace the Seasprites as the ones we have could easily fly into the 2020s but as the world's only Seasprite operator it seems only prudent that we should replace them in the not so distant future.The acquisition cost of MH-60Ss could be readily reduced by selling the NH90s.

That is assuming that there are governments that agree with the Air Force that the NH90 is not a lemon. For there is no better test of the value of any capital item than its resale value. The treasury should certainly be testing this to see if its current capital valuations are correct (as the Air Force is charged for capital) and also to test the reliability of the advice it recieves from the Air Force brass. If that turns out to be butt covering nonsense then perhaps the Minister of Defence should take a more hands on approach to the management of this very expensive public service.