Mercenary helicopter gunships remain grounded on Defence base after 18 years
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Mercenary helicopter gunships remain grounded on Defence base after 18 years

Taxpayers are still forking out money to store two Russian-made helicopter gunships – once owned by a mercenary outfit – that should have been disposed of 18 years ago.

The Mi-24 "Hind" attack helicopters had been in bureaucratic limbo for almost two decades because the soldiers of fortune who owned them could not find a buyer.

Storage has cost the federal government an unquantifiable sum.

Even though an audit report last February again highlighted that the helicopters were sitting in storage at the northern Australian base of Tindal, the Defence bureaucracy still believed they would not be removed until the middle of 2016.

A parliamentary committee report, which was signed off in June, said it had been told of "further delays" in disposing of the aircraft.

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The helicopters were essentially left in Australia by a mercenary outfit, Sandline International.

The company's controversial failed deal with the Papua New Guinean government to oust revolutionaries at the Panguna mine in Bougainville – known as the "Sandline Affair" – ended with Sandline armaments bound for PNG being intercepted and diverted to Australia and kept here rent-free.

A report by Parliament's joint public accounts and audit committee said the helicopter saga should never be repeated.

The report delved into challenges faced by Defence when it came to disposing of equipment.

The Defence bureaucracy has been warned the threat of conflict of interest exists when it comes to selling highly expensive pieces of equipment.

Former Australian Defence Force members who win jobs at private companies pose tough challenges for Defence as it tries to limit conflicting interests on big-dollar contracts.

A parliamentary committee has warned that new reforms, which roll the Defence Materiel Organisation into the Defence Department, could increase the risk of conflict of interests arising.

"The committee is concerned that the One Defence reforms, that will result in DMO being folded back into the Department of Defence, may, in some way, undermine the improvements being made to the disposal of [specialist military equipment] given that DMO has oversight of this function," the committee's report said.

"Although the committee is encouraged by Defence's initiatives, one of the challenges will be that the enthusiasm currently being shown and the reforms currently being instituted result in long-term reform in the procedures and policies of SME disposal.

"To ensure that the current momentum and reform in this area is maintained, an initial follow-up audit (published by the Australian National Audit Office in February) should be considered within 12 months following the tabling of this report with the possibility of further audits in the future."

The committee also said it was concerned by the high staff turnover at the Australian Military Sales Office.

When AMSO was established in July 2012, it incorporated the Defence Disposals Agency, which had 11 staff members.

Seven of these staff members, including the director, have since left the AMSO.

"To ensure that this expertise is maintained, training for new staff is essential but so too is the necessity for departing staff to ensure that their corporate knowledge is preserved and transmitted to incoming staff," the report said.

As it gathered evidence, the committee was told Defence was trying to change a culture which regarded the disposal of military equipment as the "poor cousin" of procurement.

Buying equipment requires more rigorous planning.

Selling military equipment raised $12.5 million in 2012-13 and $49.4 million in 2013-14.

Defence disposal activity was expected to increase in the medium term because of Defence's major program of upgrading and replacing equipment during the next 15 years.

Phillip Thomson is a Public Service Reporter at The Canberra Times.