The Department of Defence has confirmed it is examining the possibility of buying much-needed medium-lift helicopters through a public-private partnership (PPP) arrangement.
The move follows the controversial decision by the Minister for Defence, Mr Smith, last week to cancel a €87 million contract for the supply of five Sikorsky aircraft which were to be used for troop transport and search-and-rescue missions.
A spokesman for the Minister said yesterday that the Department is now looking at how the helicopters could be supplied by other means. He said a PPP or leasing arrangement were two options currently being investigated.
A working group of officials from the Departments of Defence, Marine and Finance is due to meet this week to look at how the helicopters can be acquired.
"We have to find a way to get the money and a PPP or leasing arrangement are both possibilities," the spokesman told The Irish Times.
There was speculation yesterday that Defence officials are devising a scheme whereby private investors would buy the helicopters, which would then be bought by the Government over time.
The Defence Department spokesman said that speculation on PPP was premature and that all options were being looked at.
The shock decision to cancel the contract for the five helicopters came after the Minister for Finance, Mr McCreevy, ordered tough budget cutbacks.
All Ministers were circulated with a memorandum at Cabinet last Wednesday warning that there would have to be reductions in expenditure across all Departments.
Dropping tax revenues and an increase in spending in the first half of the year have put pressure on the Government finances. Mr McCreevy has told Cabinet colleagues that firm action had to be taken in the second half of the year if the Government was to deliver a small budget surplus.
Late on Friday night, the Minister for Health, Mr Martin, announced an increase in accident and emergency visit charges and charges for the drugs payment scheme. The charge for people going to an A&E department without a letter of referral will increase from €31.70 to €40. People with long-term illnesses and without medical cards will in future have to pay €65 a month before they are entitled to claim refunds on drugs.