Military plane purchase to get go-ahead

OTTAWA— The government has made an about- face on a major defence procurement and will announce plans to spend $ 4.6 billion on acquiring 16 military transport planes for the Canadian Forces.

Last week the military shelved a proposed $12-billion outlay for planes and helicopters, but government sources said that since then Defence Minister Bill Graham has successfully persuaded his cabinet colleagues of the urgent need for at least a scaled- down purchase. Rumours began circulating within the defence community late last week that a procurement deal would be resurrected, and aerospace industry sources said military officials were feverishly finalizing a proposal last night that will be presented to the Treasury Board today. Government sources confirmed cabinet will then be asked to consider a last- minute purchase of new transport planes to replace the current fleet of 40- year-old Hercules, many of which are older than the pilots who fly them.

Canada’s 32 C- 130s are the oldest military Hercules in the world. In fact, other countries look to Canada’s air force for lessons in how to keep the aging planes in the air.

But the job of flying supplies to Canada’s increasing presence in Afghanistan and search-andrescue duties at home will stretch the fleet to the limit starting next year.

Federal ministers are expected to approve the purchase even as the opposition prepares to defeat the government early next week.

“ The troops will get the equipment they need,” a Martin aide said. Graham and Gen. Rick Hillier, the chief of defence staff, will formally announce the plan tomorrow. The purchase was originally part of a larger proposal to also buy heavy-lift choppers and search- and- rescue aircraft. But cabinet soundly rejected the proposal last week.

In hindsight, senior defence officials said, the defence department took an unwise gamble in pushing ahead with such a massive, complicated purchase on the eve of an election.

After the humiliating reversal, the defence department changed its tack and decided to push the most urgent part of the proposal — a new transport aircraft that could take the place of the aging Hercules. Prime Minister Paul Martin acknowledged that need and agreed cabinet should take a second look at this part of the proposal, said a well- placed government source.

“ I think it’s the most urgent and I think you could make the case it’s the least complicated for procurement,” the source said.

Defence officials have steadfastly insisted the contract for the purchase will be awarded after a transparent competition. However, some within the industry complain that the purchase requirements have been skewed to favour U.S.-based aerospace and defence giant Lockheed Martin.

Lockheed, which produces the C- 130J successor to the Hercules, is widely believed to have the inside track.

There are at least two other heavyweight contenders interested in vying for the contract: Boeing ( with its C- 17 transport) and Airbus Industrie’s A- 400.

“ They would have to sharpen their pencils,” the defence official said of the Airbus bid.

Detractors insist the Hercules is inadequate for moving Canada’s armoured troop carriers and other materiel, and that its purchase and maintenance costs are greater. And in the hardball world that is military contracting, Lockheed’s competitors privately groused about ties between senior defence officials and some of the company’s lobbyists.

Yesterday a high- ranking government official defended the fast- track process.

“ We want to have a process that will be fair and have integrity. We also want to get soldiers the equipment they need right away. There’s always conflict between those priorities,” the source said. The senior official cautioned lobbyists who criticized the $ 12billion package not to take last week’s decision to scrap it as a victory.

“ The self- interest of the lobbyists is impossible to overstate. If they think what happened last week was a victory over Rick Hillier and Bill Graham, they’re in for a sorry lesson in real politics,” the source said.

Defence officials, meanwhile, insisted that there would be a true competition but admitted specific criteria like speed, range, cargo capacity and the ability to operate in remote regions of the world could limit the field.

Industry sources said representatives for all the bidders spent the weekend working the phones, and the intrigue surrounding the planned purchase is only likely to grow. The Canadian Press reported the military has issued a onepage document outlining the technical requirements for the purchase. In the past, specifications have run into the thousands of pages. Under the strategy to be announced this week, the winning bidder will have to deliver the first aircraft within 36 months of signing a contract, far more quickly than the average 12 years it takes to carry out major procurements. Graham intends to move forward with other proposals for the helicopters and search and rescue aircraft but likely not until after the looming election. The transport aircraft was the “most critical piece,” the defence source said. The original plan was derailed amid opposition within cabinet and heavy lobbying by other defence contractors. They held up the example of the politically disastrous decision by former Progressive Conservative prime minister Kim Campbell to announce a multibillion rescue helicopter purchase on the eve of the 1993 election. ONLINE UPDATES

The latest on Parliament Hill: www. thestar.com