The Canadian government has signed a principles of agreement (POA) with Sikorsky Aircraft to revive the long-pending multi-billion dollar maritime helicopter project.
The agreement is expected to form the basis of formal contract negotiations to put into place the recommendations suggested by a third-party report to improve the programme's viability with a different project structure and governance model.
In addition, the government has commissioned an independent third party, Hitachi Consulting, to determine the viability of the programme.
Specifically, the POA will lead to helicopters delivery with operational capability sufficient to begin retirement of Sea King helicopters in 2015, and a programme to boost those capabilities culminating in a fully capable CH 148 Cyclone Maritime Helicopter in 2018.
Canadian National Defence Minister Rob Nicholson said the decision to continue the project consistent with the government's goals of getting the Canadian Armed Forces the equipment they require, while protecting the investments taxpayers have already made in the programme.
Canadian public works and government services minister, Diane Finley, said Sikorsky has committed to deliver the needed helicopter capability at no additional cost to Canada, under the new terms established in the POA.
"In addition, the government of Canada will only issue further payment to Sikorsky upon capability," Finley said.
Sikorsky Aircraft president Mick Maurer said the company has completely restructured its approach, and also added considerable new resources and technical expertise.
"As a result of the third-party review commissioned by the government of Canada, we believe we have the right plan in place to deliver the most capable maritime helicopter in the world," Maurer said.
Sikorsky has also agreed to pay $88.6m to the government in liquidated damages for non-delivery in 2013.
The restructured programme will see continuation of the initial training and testing of the Cyclone, which is currently underway in Shearwater, Nova Scotia, Canada.
The Maritime Helicopter Project involves delivery of 28 combat-capable CH-148 Cyclone helicopters, associated logistical and in-service support, spare parts, modifications to the Halifax-class ships, as well as construction of a new training facility.