An announcement is expected by the end of this year and a possible letter of acceptance in 2016, the source said. A US-based defense industry analyst said the deal was estimated at $700 million to $800 million.
Taiwan's Ministry of National Defense confirmed that the MD500s are scheduled for retirement and that it was seeking a replacement.
The revelation comes on the heels of news that Lockheed Martin will acquire Sikorsky Aircraft, maker of the Seahawk, from United Technologies for $9 billion. The new Seahawks will also augment the Navy's existing inventory of 18 S-70C(M) ASW helicopters now in operation.
"Some of the older S-70s' mission equipment and avionics is outdated," the defense industry source said. The MH-60Rs will be able to take up some of the heavy lifting.
"This is good news. The MH-60R program is essential to Taiwan's maritime security and represents an important new capability for the ROCN," said Rupert Hammond-Chambers, president, US-Taiwan Business Council, Arlington, Virginia. "The main issue is ensuring the budget is suitable for a program of this cost as Taiwan's ruling party continues to underinvest in the defense budget.
"It is also noteworthy that if the MH-60R LoR is accepted this fall it will be the first new program for new equipment that would result in a new capability since the autumn of 2006. This in the face of ongoing reporting by the Bush and Obama administrations that the cross-strait military threat expands annually."
Taiwan's Navy has two S-70C(M) ASW squadrons, the 701 and 702, formed in 1991 and 2000, respectively. The Navy also has an active ASW squadron (501) of 10 MD500 Defender helicopters procured in 1980.
The MD500s are now "worn out" and "couldn't find a submarine unless it was washed up on the beach," the defense industry source said. They could still use some of the MD500s for pilot training, but they are finished as an operational platform, he said.
Taiwan has been beefing up its ASW missions with the replacement of two squadrons of Northrop Grumman S-2T Turbo Trackers with 12 refurbished P-3C Orion ASW aircraft.
In 2010, the US announced a $3.1 billion deal for 60 UH-60M helicopters to be delivered 10 a year until the final transfer in 2018. "It's not a production problem, it's a rate of delivery the military wants for training reasons," the local defense industry source said.
However, after 700 people were killed by Typhoon Morakot in 2009, Taiwan's President Ma Ying-jeou announced that 15 of the aircraft would be given to the National Airborne Service Corps (NASC), under the Ministry of Interior, for humanitarian missions. The NASC has a mix of helicopters for rescue and transport missions: AS365N1/N2, S-76B, UH-1H and B234/CH-47.
Taiwan still needs additional Sikorsky UH-60M Black Hawk utility helicopters to replace the 15 Black Hawks transferred to the NASC and to replace the 45 remaining Bell UH-1H utility helicopters. These additional Black Hawks would properly equip its third battalion, the 603 Army Aviation Battalion, now outfitted with nine Boeing CH-47D Chinook cargo helicopters and other training helicopters.
The 601 and 602 are outfitted at present with a combination of older AH-1W Super Cobra attack helicopters and UH-1Hs, and new AH-64 Apache Longbow attack helicopters.
However, the US-based defense industry analyst said there have been no specifics about "a follow-on UH buy, although replacement for the remaining UH-1Hs is both logical and justified, made all the more necessary by Ma's decision to give 15 Black Hawks to the disaster relief authorities. The better question is: when will the money become sufficiently available to fund such a costly program?"
Taiwan's defense industry/community criticized Ma's decision because the MH-60M was a combat configuration, not for search and rescue. The sudden announcement put pressure on the US government's FMS program to make late adjustments, which resulted in no significant changes in the first nine aircraft.
"The first nine will be the same as the Army variant, except it will include a different radio, the TFM-500 Federated Radio, and a Bambi bucket [for firefighting]," the defense industry source said. The final six for NASC will include the same TFM-500 radio and Bambi bucket, but will also be configured for search-and-rescue operations.
Additional announcements and news are expected next month as Taiwan and US defense industry officials, along with government officials from both Taipei and Washington, gather at the upcoming biennial Taipei Aerospace and Defense Technology Exhibition, Aug. 13-16. So far, 102 exhibitors will display their wares with 265 booths.
US exhibitors will include General Dynamics Mission Systems, Lockheed Martin and Rockwell Collins. Taiwan exhibitors will include Aerospace Industrial Development Corp., Chungshan Institute of Science and Technology, Ministry of National Defense, National Space Organization, Trivet Industrial Corporation, and U&U Engineering. This year the show will include its first UAV exhibition area.
A U.S. Navy Sikorsky MH-60R Seahawk, NG 710 166520 of HSM-71 "Raptors" dips the sonar over the Pacific Ocean.