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Tuesday, March 1, 2011

UK Search & Rescue Needs a Lifeline

Military Insider

By Andrew Drwiega

It’s back to the drawing board as far as the future of the UK’s military Search and Rescue helicopter fleet is concerned. The Soteria Consortium, winner of the Private Finance Initiative (PFI) Search and Rescue—Helicopter (SAR-H) competition, launched by the UK government in 2006, has had its bid cancelled. Soteria (comprising CHC Helicopter, Thales UK and Sikorsky—and the Royal Bank of Scotland at the time) celebrated winning the bid in February 2010 when the British government chose it ahead of the Airknight bid (comprising Lockheed Martin UK, VT Group and British International Helicopters).

On February 8, the Secretary of State for Transport, Philip Hammond, announced that: “the Government has sufficient information to enable it to conclude that the irregularities that have been identified were such that it would not be appropriate to proceed with either the preferred bid or with the current procurement process.”

Earlier the statement had been more specific: “The irregularities included access by one of the consortium members, CHC Helicopter, to commercially sensitive information regarding the joint MOD [Ministry of Defence]/DfT [Department for Transport] project team’s evaluations of industry bids and evidence that a former member of that project team had assisted the consortium in its bid preparation, contrary to explicit assurances given to the project team.” The bid first stalled after the new coalition government conducted the Strategic Defense and Security Review (SDSR) and value for money (VFM) spending review, the latter examining projects approved since January 2010. Soteria’s expected confirmation in December 2010 was undermined at the last minute by the Royal Bank of Scotland’s withdrawal as an equity partner. This was quickly followed by another statement from Philip Hammond on December 16 which declared that “the preferred bidder has informed the Ministry of Defence within the last 48 hours that it has become aware of a possible issue in connection with its bid to provide the UK Search and Rescue capability.”

In January 2011 the bid became the subject of a military police investigation and was officially cancelled. CHC issued a statement stating that as soon as senior management became aware that some of its employees were “acting without its knowledge or authorization,” it immediately informed the government customer.

But this now leaves the Ministry of Defence facing a financial headache at a time when additional spending cuts, over and above those to come out of the SDSR, are being contemplated in the 2011 spending review. It is now virtually certain that funds will have to be found to sustain the military Sea King fleet, which was to have been phased out between 2012–2017 as the flow of new S-92 SAR-H aircraft were fielded.

With millions of pounds having already been spent by government and all of the SAR-H bidders, the prospect of numerous legal actions is already looming on the horizon. The MoD now needs to act quickly and decisively by launching a new strategy or another competition. It is unlikely to want to retain the Sea Kings for longer than it has to or embark on procuring new aircraft that it will own. The problem is larger than it looks. There are still around 70 Sea Kings in use or held in storage by the Royal Air Force, Royal Navy and Royal Marines (Commando Helicopter Force).

According to Transport Secretary Hammond, his department is now looking into other procurement options, which will include maintaining the continuity of the existing Sea King force in the short term. Significantly those who are likely to benefit from this turn of events are those companies involved in the Sea King Integrated Operational Support (SKIOS) program through the prime contractor AgustaWestland (UK Air Rescue bid). These include VT Aerospace (Airknight), Thales UK (Soteria), Serco (UK Air Rescue) and Selex SA&S.

Had it not been for the recession and the government’s clawing at public financial spending across the board, this may perhaps have presented a great opportunity for the UK government to rethink its entire approach to helicopters in public service across the UK. The ambition to provide a National Police Air Service across England and Wales could be coordinated with a new approach to the provision of Search and Rescue helicopters. In November the Avon Fire and Rescue Service announced that it wanted to be the first fire brigade to have its own helicopter, but is there an opportunity to procure additional helicopters to provide a nation-wide capability? Perhaps also it would lead to a reform in the existing air ambulance provision—currently surviving to a greater or lesser extent on the wealth and charitable donations by the population of each region.

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