For discussion
FCR(97-98)94
on 27 February 1998

ITEM FOR FINANCE COMMITTEE

HEAD 166 - GOVERNMENT FLYING SERVICE
Subhead 603 Plant, vehicles and equipment

Members are invited to approve a new commitment of $728.5 million for procuring three large and five small helicopters to replace the existing helicopter fleet of the Government Flying Service.

PROBLEM

We need to upgrade the existing helicopter fleet of the Government Flying Service (GFS) to improve our flying services.

PROPOSAL

2. The Controller, GFS, with the support of the Secretary for Security, proposes to replace the existing three Sikorsky S70 Blackhawks and six Sikorsky S76 helicopters by three large and five small helicopters to enhance GFS's capability, efficiency and operational flexibility and improve its services.

JUSTIFICATION

Limitation of the existing helicopter fleet

3. GFS provides services of medical evacuation, search and rescue, police support, fire fighting as well as other flying services for various government departments. It currently has a helicopter fleet comprising six Sikorsky S76 for off-shore search and rescue, medical evacuation and general duties, and three Sikorsky S70 Blackhawks mainly for police support, fire fighting and inland search and rescue operations. The Controller, GFS has reviewed the service provided by the existing helicopter fleet against present and anticipated demands. He has concluded that we need to improve the service by -

  1. extending the present area of coverage for search and rescue operations off-shore in the South China Sea;

  2. increasing the number of survivors that could be rescued per trip in an operation;

  3. shortening the transfer time for casualty evacuation of patients; and

  4. providing modern equipment to support search and rescue and police operations at night and in poor visibility.

As explained in the following paragraphs, the capability of the present helicopter fleet is limited and cannot meet these service improvements.

Limited capability for long-range search and rescue

4. We have both legal and moral obligations to contribute to search and rescue efforts in the region. Hong Kong is bound by the International Convention on Maritime Search and Rescue which provides for coordination of search and rescue operations among neighbouring regions. Our current area of responsibility covers mainly the sea area surrounding Hong Kong, extending some 700 nautical miles (nm) (1 300 kilometres (km)) to the south. However, the capability of the existing fleet of GFS is limited as explained in the following paragraphs. We need to extend its area of coverage.

5. At present, GFS carries out off-shore search and rescue by the S76. While S76 has a radius of action of about 140 nm (260 km), its effective operating range is limited to about 100 nm (185 km) maximum in still wind to allow sufficient fuel for staying on the scene. The average on-scene time for S76 is only 15 minutes. The limited operating capability of these helicopters has, in some cases, resulted in GFS being able to carry out a rescue operation at sea only when the vessel requiring help comes within the 100 nm (185 km) range. On other occasions when GFS has to perform rescue operations beyond the S76's distance and endurance limit, we would need to refuel the helicopters on oil rig or alternatively use fixed wing aircraft to drop life raft. On average, this happens about 20 times a year and is unsatisfactory. There is only one known oil rig where refuelling can be made, but it may not be in the vicinity of the flight path to the location of incident. Even if it were, such refuelling adds to the mission time. Fixed wing aircraft have a longer operating range, but they have major limitations in rescue operations. For example, unlike helicopters, they cannot directly and safely extract survivors from the scene. Fixed wing aircraft are also less expedient in transferring survivors to hospitals for medical treatment.

6. The S70 Blackhawks have a greater radius of action of 280 nm (520 km) and are primarily for the purpose of supporting police operations. However, they lack floatation equipment that could keep the helicopter afloat in the event of an emergency water landing. They also lack automatic pilot system which would enable them to fly safely in adverse weather condition and at night. Deployment of S70 Blackhawks in search and rescue operations is thus limited mainly to inland.

Limited number of survivors to be rescued

7. The limited on-scene time of 15 minutes of the S76 means that we can pick up only one survivor per trip in an off-shore operation. Furthermore, the cabin of the S76 is small with limited room for the transfer of survivors. By comparison, the S70 Blackhawks can remain on the scene for one hour and can pick up eight survivors per trip. However, as explained in paragraph 6 above, they have limitations in off-shore operations and can only be used for inland search and rescue.

Long transfer time of casualties

8. Helicopters do not normally take off or land with a runway, and they must have adequate power margin to ensure safe landing and take-off from a helipad. In the event of a single engine failure on take-off or landing, the aircraft must have the performance to execute a safe landing to a landing point or have the ability to fly away safely on the remaining good engine. The present S76 helicopters have limited engine power and cannot guarantee safe operations onto roof tops and landing sites in congested areas. For this reason, we do not normally use such sites. We cannot therefore transfer casualties to the hospitals direct in most cases and have to transfer them to the GFS Headquarters at Kowloon Bay first and then by road transport to the hospital. This lengthens the time required to transfer casualties to hospitals in rescue missions. In 1997, GFS carried out 1 428 cases of casualty evacuation transfer.

9. Although the S70 Blackhawks have the power margins to meet the above requirements, they are not suitable for off-shore long-range operations as explained in paragraph 6.

The need for a new helicopter fleet

Search and rescue capability

10. To improve the present search and rescue service, GFS needs helicopters with an operating range of 200 nm (370 km) in all directions, with on-scene time of one hour for searching and safe recovery of survivors, especially during serious incidents in adverse weather conditions, and with higher power margins for safe operations on rooftop and landing sites. This will enable GFS to double the present area of coverage for search and rescue in the South China Sea, to rescue more survivors per trip in each operation and to shorten the time of casualty evacuation transfers.

11. In addition, the Controller, GFS considers it necessary to further improve the search and rescue service by equipping the helicopters with more advanced Forward Looking Infra-red Radar (FLIR) system and Night Vision Goggle for operations at night and in poor visibility to allow for the fleet to have an all weather day/night capability.

Support to Police operations

12. Apart from search and rescue service, we would need to improve GFS's support to Police operations in the following areas -

  1. providing through modern surveillance equipment more effective night surveillance over Hong Kong waters in support of anti-smuggling operations;

  2. enabling transmission of real time FLIR imagery to the emergency command and control centres; and

  3. meeting all civil aviation requirements and reducing aircraft noise during general Police duties.

The new helicopters

13. With rapid technological advancement in aviation, new helicopter models which fully meet the requirements as described in paragraph 10 have been available in the market since 1996. We consider it timely and necessary to upgrade our helicopter fleet. We therefore propose to purchase three large helicopters which are capable of carrying out the dual roles of long-range off-shore search and rescue and providing efficient support to police operations. We shall then require only five small helicopters with greater power margins for general duties and inland search and rescue.

14. The replacement helicopters to be purchased will be fitted with modern equipment and meet our requirements. They will have better and safer performance to engage in all weather day/night search and rescue operations over land and water. At the operating range of 100 nm (185 km), the three new large helicopters can remain on the scene for three hours and pick up 24 survivors per trip. They will have a maximum operating range of 200 nm (370 km) at which the on-scene time is one hour and ten survivors can be picked up per trip. As regards the five new small helicopters, they will have a maximum operating range of 100 nm (185 km) and half an hour on-scene time. Two survivors can be picked up per trip. These performance standards represent significant improvements over what GFS is capable of providing with the present fleet.

15. The new helicopters will have adequate power margin making it possible for the GFS to carry out rooftop operations and utilise all landing sites and rooftop helipads. Hence, GFS will be able to transport casualties directly to hospitals with landing sites and rooftop helipads, thereby ensuring speedy treatment of casualties.

Other Options

Modification of existing helicopters

16. We have considered the option of reducing the number of new helicopters to be procured by upgrading some of the existing ones. Four of the S76 (the S76A+ model) are of a built standard that simply cannot be upgraded. Technically speaking, we could upgrade the remaining two S76 (the S76C model) to increase their power margins. However, this will not be a cost-effective and desirable alternative. The average time to complete the upgrading works will be four to six months per aircraft (or 2 100 man-hours per aircraft) at a minimum cost of $11 million per helicopter. More importantly, assuming that we replace the four existing S76 and upgrade the other two, we would end up with a S76 fleet with two types of helicopters each with their own spare parts, operating procedures and performance capabilities. This is highly undesirable in terms of flight safety and cost effectiveness. The Director of Civil Aviation has advised that it would be unwise for the crews of GFS to operate more than two types of aircraft simultaneously.

17. As regards the three S70 Blackhawks, we could, as an alternative to replacement, equip them with a limited floatation device to enhance their suitability for long-range off-shore search and rescue. The cost is about $27.3 million per airframe but the device may not meet fully the operational requirements. Modification to these helicopters to include automatic pilot system with search and rescue functions is technically not feasible.

Partial replacement of existing fleet

18. We have also considered partial replacement of the present helicopter fleet but concluded that this is undesirable because of a number of reasons.

19. First, the tasks undertaken by the two new types of helicopters are different. The large replacement helicopter will specialise in long-range search and rescue, fire fighting and Police support, while the small replacement helicopter will be for general purposes and inland search and rescue. Replacing only the S76 with new small helicopters will not enhance our off-shore search and rescue capability as the new small helicopters and the S70 Blackhawks are not equipped for this purpose. Replacing the S70 Blackhawks alone with new big helicopters would mean that we still have to rely on the S76 to carry out many duties, but they would be subject to considerable constraints due to inadequate power margin.

20. Secondly, if we were to replace only some but not all of the S76s and S70s respectively, GFS would have to operate more than two types of helicopters at the same time. This is highly undesirable as it would seriously hamper GFS's flexibility in the deployment of aircraft and staff. It would also entail significant resource requirement for training. This cannot be cost effective. Furthermore, as explained in paragraph 16, there will be operational and maintenance problems, to the extent that flight safety could be compromised.

FINANCIAL IMPLICATIONS

21. The Controller, GFS estimates that the total non-recurrent cost of the proposal is $728.5 million, made up as follows -

Item


$'000




(a) Three replacement helicopters for the three S70 Blackhawks


420,100




(b) Five replacement helicopters for the six S76


233,800




(c) Spares and support parts


69,124




(d) Evaluation and support


883




(e) Pilot and engineering training


4,593




Total


728,500

Expenditure would be spread over a period of four years in line with the delivery schedule and terms of payment. The estimated cashflow will be as follows -





$'000



1998-1999



223,650



1999-2000



316,058



2000-2001



169,932



2001-2002



18,860



Total



728,500


22. As regards paragraph 21(a) and (b), these cover the cost of basic design, manufacture and delivery costs of the eight purpose-built replacement helicopters. The estimates are based on a market study conducted by GFS in 1997.

23. As regards paragraph 21(c), this covers the cost of spare and support parts for three years to provide a stock/spare base and the delivery cost.

24. As regards paragraph 21(d), this covers the cost of overseas visits for evaluating the helicopter models and the cost of providing a manufacturer's technical representative and an instructor pilot by the manufacturer to Hong Kong for essential initial assistance to GFS.

25. As regards paragraph 21(e), this covers essential tailor-made training for pilots and maintenance staff provided by the manufacturer.

26. With the eight replacement helicopters, GFS will continue to provide 24-hour coverage and the same amount, if not more, of flying hours as at present. Since the staffing level and spare parts and maintenance cost of the helicopters required are closely related to their utilisation, the Controller, GFS estimates that the annual recurrent expenditure for the replacement helicopters will be the same as the current fleet, which is $88.8 million.

27. We shall sell the nine existing helicopters and the associated spares when the eight replacement helicopters are in service. While the resale price will depend very much on the condition of the helicopters at the time of sale and on whether there would be competitive demand for that type of helicopter, we expect that we would be able to recover about $360 million from the resale of the existing fleet.

Implementation Plan

28. The Controller, GFS plans to purchase the helicopters through a world-wide public tender exercise. We shall form a Helicopter Replacement Evaluation Team and conduct overseas visits to examine and select suitable helicopters models. The following is the programme schedule -



Target completion date





(a) Preparation of tender specifications


April 1998






(b) Preparation and issue of tender documents


May 1998






(c) Evaluation of tender proposal


September 1998






(d) Negotiation with tenderer


November 1998





(e) Submission to Central Tender Board and award of contract


December 1998






(f) Delivery of helicopter


2000 (for five new small helicopters)

2001 (for three new large helicopters)

BACKGROUND INFORMATION

29. At the Finance Committee meetings held on 9 December 1987 and 25 January 1989, Members approved the purchase of three and five S76 helicopters respectively. These eight S76 entered service in 1990 and 1991. The Finance Committee further approved the purchase of two S70 Blackhawks in March 1992 and one S70 Blackhawk offset by selling two S76 helicopters in December 1994. These S70 Blackhawks commenced operation in 1992 and 1995 respectively. The GFS now operates a fleet of nine helicopters.

30. The Finance Committee discussed the proposal to replace the existing helicopter fleet, vide FCR(97-98)68, at its meeting on 28 November 1997. Members considered it necessary for the proposal to be first discussed by the Panel on Security of the Provisional Legislative Council and we withdrew the proposal. Subsequently, we arranged a visit to the GFS for Members of the Provisional Legislative Council on 20 January 1998 to explain on site the justifications for the replacement proposal, following which the Panel on Security decided that it was not necessary for further discussion at the Panel.


Security Bureau
February 1998