Written by: Brett Lyndon – The Pro Forum Community of Practice

There has been plenty of media attention on Army’s no ‘retired’ fleet of MRH-90 helicopters over recent months. I read a news article recently that got me thinking about Government asset disposal. The article indicated that these now defunct helicopters would be scrapped instead of being sold or otherwise disposed of.

I am not privy to the conversations and discussions behind this decision, but to me, it appears, at face value, to not comply with the principles of government asset disposal. Primarily, that is to achieve the best net return for government. If we consider this from a purely financial perspective, then surely selling off these helicopters, just as we have done for many other high value items like tanks and aircraft, would be the most appropriate solution. This way we could offset some of the cost of buying replacement Blackhawk helicopters with the proceeds of sales. Further this option would allow the helicopters see out their economic service life and provide benefit for others.

Scrapping, (which I have interpreted as destruction for the purposes of this article), whilst a legitimate and effective method of asset disposal brings with it several very important considerations. The first thing to consider is the loss of potential revenue that might have been achieved through the sale of these assets. Environmental aspects associated with this method also need to be taken into account. The removal of any environmentally hazardous materials, items going into landfill and how much material can be recycled, all need to be considered and evaluated.

There is another factor that I think needs to be discussed in the making of this decision. The Australian Government’s, and by extension the Australian Defence Force’s, reputation. The MRH-90 helicopters have not performed as expected by Defence standards. They have been plagued with reliability, maintenance and supply chain issues through their service life in Defence. To sell these helicopters to another interested party would be to on-sell these issues resulting in reputational damage for both Defence and the Australian Government. A less than desirable outcome for any government or department.

Overall, if scrapping does indeed mean destruction and dumping, I would not consider this a completely bad outcome for Defence or Government. Yes, more money could have been realised if they had been sold to an interested party, but at what cost to the reputations of the Australian Government and the Australian Defence Force. Provided appropriate steps are taken to ensure the best possible environmental and sustainability outcomes, personally, I am reasonably content with this disposal decision.

 

What do you think? Please tell us your thought in the comments.

 

NOTE: The content of this article is intended to provide a general guide to the subject matter, and specialist advice should be sought about your specific circumstances. The content must not be relied upon as legal, technical, financial or other professional advice.