Australia in $2.8bn plane deal
From correspondents in Washington
April 04, 2006
THE US Defence Department has approved a possible sale of up to four Boeing Co C-17 cargo planes and associated equipment to Australia, in a deal worth up to $US2 billion ($2.8 billion).
The Pentagon's Defence Security Cooperation Agency today told Congress the Australian government had requested the sale of the C-17s, up to 18 F-177 engines made by United Technologies Corp's Pratt & Whitney unit, and up to four AN/AAQ-24 infrared countermeasures systems made by Northrop Grumman Corp.
Politicians now have 30 days to reject the proposed sale, which also includes night vision goggles and assorted other equipment, but Congress has rarely acted to block a sale.
DSCA, which oversees major arms sales, said the sale would give Australia a heavy airlift capability, which it currently relies on the US Air Force or contract carriers using Russian aircraft to provide.
"The C-17 will greatly improve Australia's capability to rapidly deploy in support of global coalition operations and will also greatly enhance its ability to lead regional humanitarian/peacekeeping operations," the agency said.
It said the proposed agreement would likely include offset agreements with Australian companies, but said those would be determined in negotiations between Australia and the contractors during detailed discussions if the sale is approved.
The proposed sale is welcome news for Chicago-based Boeing, which has been lobbying Congress to continue production of C-17 cargo planes beyond the current cap of 180 set by the Air Force, which would mean shutting down the production line in fiscal year 2008.
Boeing said it was in contract negotiations, and current plans called for production of 15 C-17s a year at the company's plant in Long Beach, California, said spokeswoman Kerry Gildea.
She said the company was also talking with other countries, including Canada and Sweden, that had expressed interest in the cargo planes.
In past years, Congress has added money to military budgets to help cover the services' so-called "unfunded requirements," which this year include seven more C-17s for Iraq. Air Force officials are hoping for extra funds to extend the C-17 line.
Australia said the first C-17 plane could be delivered later this year with the rest delivered by mid-2008. The Australian defence department's purchase came on top of an $US28.5 billion ($39.87 billion) increase in spending the government has committed to over the decade ending in 2010.