'Disaster' MRH-90 helicopter fleet cost blows out months after retirement announcement

Experts have described the issues-plagued aircraft as an "absolute disaster" and a perfect case study in procurement mismanagement made worse by political interference.

Defence Minister Peter Dutton outlined in his answer to a question on notice the fleet of 47 MRH-90 Taipan helicopters had flown 4835 hours last year against a sustainment cost of $241.7 million, equating to $50,000 per hour.

Mr Dutton's response to Senator Rex Patrick's questions said the fleet was originally planned to reach more than 10,000 hours per year, which would equate to around $13,000 per hour.

The late Howard-era helicopters, which have cost nearly $4 billion in their 15-year lifespan, were planned to be in the field until 2037 but Mr Dutton confirmed in December they would be retired early due to performance and cost issues.

The fleet has been the subject of a number of problems, including a major door flaw and a tail rotor issue, which have resulted in the entire fleet being grounded nearly 10 times for weeks or months at a time.

But senior military figures have continued to stand by the helicopter until it was shelved in December last year.

Chief of the Defence Force General Angus Campbell said the helicopters were "extraordinarily advanced" and the flaws were being worked through in a Senate estimates hearing in late 2020.

Senator Patrick, a former submariner, said the ongoing saga highlighted a transparency issue for the Defence Department.

"[Defence] accepted there were problems but said that they were they were progressing well and that just tells you there's a huge problem in Defence," he said.

"They knew these costs were high, but they failed to share that with the Australian public.

"Many more questions need to be asked."

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Flying hours and sustainment costs for military helicopters, tracked by defence think tank Australian Strategic Policy Institute, show the MRH-90 had nearly reached its expected flying hours during 2017-18, costing around $23,500 per hour flown.

But in the three years since, the cost of sustaining the fleet has increased by tens of millions while flying hours have dropped considerably, resulting in the hourly rate more than doubling to $50,000.

Senior defence analyst at ASPI Dr Marcus Hellyer said the government made the right decision to retire the fleet but it should have been done years earlier.

"The MRH-90 is flying about half as much as other aircraft," he said.

"The MRH-90 has been an absolute disaster, both in terms of the number of hours it's been able to fly, plus the cost per hour."

Dr Hellyer said the Taipans were a political purchase in the mid-2000s because they could be assembled in Australia, generating local jobs.

It was a political decision, however, that cost billions of dollars to the taxpayer and a capability shortfall for defence, he said.

"In that sense, they have also been a total failure," Dr Hellyer said.

"One hopes that governments and Defence have learned the lesson of not acquiring things just because they're going to be built in Australia, they also have to be the right capability at the right price.

"We shouldn't be buying bad capabilities just because they're built in Australia."

A parliamentary committee report published in December 2020 had also found the fleet had "major risks and issues" affecting its reliability and capability.

The government-majority committee recommended an independent external review be undertaken into the $3.77 billion program to identify issues and prevent them from happening with future procurements.

Senior military personnel previously confirmed the fleet faced a critical design flaw rendering the helicopters' capability limited in 2020.

Several attempts were made to fix the aircraft's door and gun mount but a department official said the doors just weren't wide enough for it to be resolved.

General Campbell conceded no helicopter was perfect but defended the Taipan as "extraordinarily advanced".

"The MRH-90 is an extraordinarily advanced helicopter and it does do things that no other helicopter on the planet can do," he said.

"There is no perfect helicopter, there's no perfect machine or person and it is a matter of understanding how to fly that helicopter."

Senator Patrick said it was crucial the process be looked at under a microscope to avoid other billion-dollar projects ending up as costly disasters.

"This cost revelation says more about the problems within Defence than it does about the problems with the aircraft," he said.

"We have a whole bunch of projects where they don't even estimate what the sustainment costs are.

"What they're doing is writing blank cheques. But it's not their money, it's taxpayers' money."

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