The cost of converting the UK’s fleet of 25 AW101 Merlin Mk3 transport helicopters for future use as Mk4s by the Royal Marines Commando Helicopter Force (CHF) will be £330 million ($545 million). British Defence Secretary Philip Hammond confirmed the amount during a visit to AgustaWestland’s Yeovil factory in the UK, where much of the work will be done. He also announced that the Anglo-Italian company is receiving a five-year follow-on integrated operational support (IOS) contract worth £430 million ($710 million) for the British Army’s Apache AH.1 fleet.

The Merlin Mk3s are currently operated by the Royal Air Force (RAF). They will replace the aging Sea King Mk4s that currently comprise the CHF. The conversion work involves new glass cockpits and avionics, a powered folding main rotor head and tail, and improved undercarriage. The decision to transfer the Merlins from the RAF was taken in 2010, after the MoD dropped a plan to acquire a new future medium helicopter fleet from 2017 to replace both the Sea King and Eurocopter Puma fleets. Instead, the MoD is upgrading and increasing the UK’s Boeing Chinooks and upgrading the Puma fleet.

AgustaWestland CEO Daniele Romiti noted that the Merlins offer greater payload, range and speed to the CHF than the Sea Kings that they will replace, as well as share commonality with the Merlin Mk2s that the Royal Navy operates for maritime surveillance and attack. The Mk2s already have the seven-screen glass cockpit. The conversion work will be done in two phases, with only the first seven Merlin Mk4s available to the CHF by early 2016, when the Sea Kings are scheduled to be withdrawn. The remainder will be delivered by 2020.

The MoD said that the two contracts would secure more than 1,000 engineering and manufacturing jobs in the UK. About half of them would be at AgustaWestland, with the reminder at GE Aviation, General Dynamics UK, Selex ES and APPH Aviation Services.