Uk To Go Ahead With 40bn Eurofighter

Britain will go ahead with the £40-billion ($60 billion) Eurofighter advanced combat jet, defence secretary Michael Portillo said yesterday.

The decision means the ministry of defence is prepared to spend £1.5bn to install production facilities. The announcement is to be made at the opening of the Farnborough air show, the first time Eurofighter is to fly at Farnborough. It follows the first successful test flight of the Spanish Eurofighter prototype last Saturday

The decision comes after months of negotiation between the governments of the UK, Germany, Italy and Spain and the manufacturers over pricing for initial production .of the aircraft.

 

The four main contractors, British Aerospace, Daimler-Benz Aerospace, Alenia of Italy and Casa of Spain, produced prices below previously indicated levels, allowing a quick approval of the process by the UK. A formal go-ahead for this production investment phase will await similar announcements from the other partner governments, which are expected to give their approval this autumn.

A memorandum of understanding to cover the spending of £4 billion on tooling and production lines across the four countries should follow. Britain's £1.5 billion will be channelled through BAe, which will pass about 75 per cent of this sum to subcontractors.

The only hitch could come in Germany, where funding for the Eurofighter programme needs to be approved by powerful parliamentary committees that have opposed the aircraft in the past.

The squeeze on German defence spending as the country tries to meet the criteria for economic and monetary union means other defence programmes may have to be axed to accommodate spending on Eurofighter, increasing pressure on the committees.

Such pressure has led to German suggestions that Eurofighter production should be postponed by a year, but Daimler-Benz Aerospace has made it clear it regards early Eurofighter production as essential to its profitability.

nFinancial Times

Other Eurofighter partners are keen to produce the aircraft as quickly as possible to maximise export prospects.

Eurofighter is scheduled to enter service with the Royal Air Force in 2002, but will not have full squadrons operating until 2005. The US plans to have its cheap new Joint Strike Fighter in service by 2010, leaving a narrow gap for Eurofighter before it is challenged by new sophisticated aircraft. According to a report last month by the National Audit Office, the public spending watchdog, Britain will spend £11.3bn on producing 250 Eurofighters for the RAF, having already committed 4.1bn to develop the aircraft.