09/06/2013 09:50 EDT | Updated 11/06/2013 05:12 EST

Sea Kings' possible replacement familiar to Canadians

The irony won't be lost on military observers in Canada and around the world.

Twenty years after Prime Minister Jean Chrétien cancelled a $5-billion contract to replace Canada's already aging fleet of Sea King helicopters with the British-Italian EH 101, Canadian military officials are kicking the tires of that same helicopter, though it goes by a different name these days.

Now it's called the Merlin Mk 2 AW 101, following the merger of the Italian firm Agusta and British firm Westland, which produced the aircraft co-operatively.

The military is considering the once-rejected craft because the latest candidate to replace the Sea Kings, the Sikorsky CH-148 Cyclone, is five years late, and now might not ever make it into the Canadian fleet. That's because contract officials at the Public Works Department are now suggesting the Cyclone contract could be killed altogether.

Sikorsky has so far been unable to accommodate demands for the computers, sensors and weapons that make a military helicopter not just an aircraft, but a combat system.

Defence Minister Peter MacKay has called the deal "the worst debacle in Canadian procurement history."

Dan Ross, who formerly ran procurement for the Defence Department, says the Cyclone is a good helicopter. Sikorsky just needs more time, he says.

Ross says the air force is desperate to climb into four less-capable interim Cyclones that have already been delivered — and should do that, given the recent independent report by Hitachi that recommended just that — even though they're not up to contract specs.

"The aircraft has flown fine," Ross said. "The aircraft has been at sea in the North Atlantic at night in bad weather conditions flying off HMCS Montreal … a long time ago.

"But they promised a schedule and didn't meet that — twice — and clearly that has caused tension, and they have incurred $88 million" in penalties for failing to meet the terms of the $3-billion contract, he added.

The purchase of the Cyclone helicopters from manufacturer Sikorsky is the product of political infighting that dates back to Chrétien's decision to axe the EH 101 contract, which had been negotiated by the previous Conservative government of Brian Mulroney.

The Liberal government paid out more than $470 million in penalties to cancel the deal.