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The Ministry of Defence is trying to find a way out of a £5 billion contract to buy Eurofighter Typhoons from the consortium that builds the aircraft.
Britain is committed to buying 88 more of the £60 million aircraft, having already bought 144 for the RAF.
The MoD is negotiating with the consortium of defence companies that builds Eurofighter, which includes BAE Systems, to reduce, delay or entirely cancel the final order.
This would be a significant blow to BAE because it could bring production of the Eurofighter to an end before further export orders can be won.
Stefan Zoller, chief executive of EADS Defence Systems, which is part of the Eurofighter consortium, said that the MoD was negotiating with the aircraft’s manufacturers over how much it would cost to cut the Tranche 3 order.
The MoD has asked what each aircraft would cost if it ordered fewer than 88. The MoD is also understood to be considering delaying or cancelling the order entirely.
Defence sources said that the Treasury would not allow the MoD to buy both Tranche 3 of Eurofighter and the Joint Strike Fighter, which will be flown off the two new aircraft carriers being built for the Royal Navy.
The MoD is working on a compromise that would enable it to count 72 Typhoons that it is about to sell to Saudi Arabia as part of its 88 commitment.
However, Mr Zoller insisted that the Tranche 3 contract was firm and that this was not an option.
“The Saudi order will be on top, not instead of Tranche 3,” he said.
The British Government sent a contract for 72 Typhoons to Saudi Arabia last week and King Abdullah is expected to sign it any day. The contract will be worth about £5 billion to BAE initially, plus a further £5 billion in armaments and £10 billion in long-term maintenance.
Eurofighter was conceived in the 1980s as a pan-European project to build a next-generation fighter capable of defending the West against Soviet air attack.
Delays to the project mean that the Typhoons have only recently been deployed by the RAF.
Two Typhoons intercepted Russian “Bear” bombers over the North Sea last month in their first encounter with the enemy that they were originally built to defend against.
Britain, Italy, Germany and Spain are collaborating on the Eurofighter project and each nation has a commitment to buy a certain number of aircraft from the consortium of BAE, EADS and Finmeccanica.
The Italian Government is rumoured to want to cut its Tranche 3 commitment of 46 aircraft and, if both Britain and Italy cancel, it could force the end of Eurofighter production.
If there are insufficient orders from the partner countries, the consortium will be unable to keep production going long enough to win other orders.
Typhoon is hoping to compete in a $10 billion procurement competition in India, where it is up against America’s F16 and Soviet MiGs, and an $8 billion competition in Japan.
A spokesman for BAE said: “The consortium is talking to the British and Italian governments, as they have asked for Tranche 3 options. We are working with the MoD on our long-term partnership.”
The MoD said: “Discussions between the partner nations and industry on Tranche 3 are at an early stage and will continue throughout the rest of this year.”
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They should seek a way of getting out of the JSF contract & get the tranche 3 Typhoons, the Typhoon is way better than the F35 we're getting, why cancel 88 Typhoons for an aircraft that doesn't have ALOT of the capabilities the Typhoon has? Get out of the JSF contract, and navalise some Typhoons!!!!
Wayne, Newcastle Upon Tyne, UK
The RAF has had no credible fighter aircraft for the last 30 years The Phantom, Lightning and Tornado ADV were outdated or outclassed.
For the first time in many years the UK now has a decent air defence fighter aircraft. Let's be clear: we have no other viable option for this role, including the F35 JSF.
The MoD is a foolhardy institution lead by irresponsible politicians of all parties. All constantly underestimate the threats and challenges faced by the armed forces. All are guilty of wishful thinking.
The RAF, navy and army are all pitifully small already. The short-sightedness of the MoD/Treasury is responsible for current overstretch. Today we're seeing overstetch in the Army. Tomorrow it may be the RAF or the Navy: a reinvasion of the Falklands next March would have a fair chance of success.
All the services need spare & dedicated capacity and we should pay for it. Armed forces personnel pay the price with their lives. Lack of readiness is very dangerous.
RHYS BRIDGES, Mora, Portugal/UK
The NHS spends £5billion every two weeks.
Dominic, Manchester, UK
Amazing, India has £10 billion to spend on fighter jets, yet only a few years ago children were donating to the Blue Peter Clean Water Appeal to build water pumps in rural Indian villages with no water supply.
Paddy, Borehamwood,
Here is the price to pay for the US/UK "special relationship" ! Mobilise the best UK science and techno, build a credible fighter and at the same time answer US strident calls to invest in a concurrent (US) fighter program (the JSF). Unavoidable naval version or not, the next step is usual: the JSF cost is exploding (DoD speaks now about an average $122m per unit), imposing the cancellation of the remaining Eurofighter tranche 3 and destroying the last UK or European technological base to build a modern fighter. Thanks God: the French still resist with the state of the art Rafale, close to 100% made in France and evrywhere better quoted than the progressivelly abandoned Typhon. Oh! just one more word: how would we convince the Saoudis to choose the close to be dead Typhon? Do the Office of Serious Fraud, the US Justice Dpt or the OECD have an opinion on that?
Yves MOLLARD LA BRUYERE, Brussels, Belgium
Our forces are suffering from the fact that all their equipment was designed to fight the Eastern bloc, and very little is suitable for anti-insurgency operations.
We could buy much cheaper ground attack aircraft from the US, which would be more suitable than Typhoons, indeed the WW2 Typhoon with modern avionics would be a better aircraft in some circumstances.
The fiasco of the captured sailors in the gulf was the result of having the wrong type of ship.
K Wells, Bognor Regis, ENGLAND
The so-called resurgent Russia that has been mentioned here by Richard at Kingston-Upon-Thames has involved interceptions of Russian Tu-95 Bears, a dated cumbersome Cold War-era reconnaissance aircraft. Justifying the purchase of the Typhoon on that basis is flawed, largely as the aircraft that it will eventually replace -- the Tornado F3 -- did the same job perfectly well during the Cold War. The Typhoon at the moment is nothing more than an expensive interceptor with no comparable air-to-air threat to face. It will not even have a full air-to-ground attack capability until after 2012. On that basis, Tranche Three should be cancelled or reduced. As for withdrawing from the JSF -- or F-35 Lightning II as it is now known as -- for a cheaper option as Roy Ellor suggests. What is available? The Rafale or F-18 Super Hornet. Apart from those, it would only leave the option of navalising the Typhoon or Sweden's JAS-39 Gripen. Would any of these aircraft be capable Harrier replacements?
Michael Fishpool, Cambridge,
Hopefully at long last the mod has learnt its lesson 88 out of date fighters 5 billion plus running them and we havent got enough helicoptors for supplies .we are a small country ,we should sort out what we can afford and what we need not a wish list and back handers.Lets get the army equipped with state of the art kit for a start.the cost of running these planes for one week should be about right.
Stewart Fisher, london, England
Luke in Perth - it's not that we fall for the lies, we just have no way of getting rid of the liars, no forum for our views, and no political means or choice of avoiding liars in our own government. That's Democracy at work...
Albert Hall, Blackburn, Lancashire,
Well, what can I say, cancelling the final batch of 88 Eurofighters is just ridiculous, didn,t denis healey cancel the TSR-2 in 1965, and Duncan Sandys cancel quite a few aircraft projects in 1957, Also the growing problems with Russia calls more urgentcy for them, Des Brown is the Darlek minister for defence, he points a mechanical arm at the military and says " I will EXTERMINATE!" Some things never change.
James, Ely, United Kingdom
Cold War 2 has started, and the MOD shold buy this plus an increased number. Defence spending has to rise to a realistic level, around 3.5% of GDP as a minimum. Terrorism isn't now the only enemy. Russia is becoming a threat again - imagine Saddam (or Putin) mwith Russian weaponry at his disposal. Tranche 3 is vital to us, and a Tranche 4 too.
neil murphy, cromer,
Another product designed by a Euro Committee that no onr wants.
Johnny Norfolk, Mileham ,
The MOD should honour their commitement to the project and take all the aircraft they ordered.
We need a stronger air defence force with state og the art aircraft NOW
Gerard McAndrew, Stockport, England
We need these aircraft. With the age we live in I am gob smacked The MoD are even considering reducing the order.
James Smith, Luton, Bedfordshire
Luke in Perth. With your thinking, what exactly did you expect the British to send up to intercept the 8 Russian bombers last week that were first tracked by the Finnish and ultimately intercepted by the British, who incidently, are responsible for patrolling the NATO skies. Do they throw up Social Security cheque books?
Michael, London, UK
L Bowman - nice analogy, if I may just take it in the other direction...
If Mondeo buyer were to discover (prior to signing the contract ) that rather than gaining privileged access to a desirable product the seller was actually offloading an obligation to buy onto him, don't you think that would trigger a little discussion about price ?
Whenever I think I have plumbed the depths of stupidity of UK Civil Servants I am invariably surprised to find another level. Is it possible to have an infinitely low expectation, if so how do I set it ?
PS King A - will send sort code and a/c no by separate email for consideration
Samwise, Bristol, UK
The RAF don't need so many cold war era conceived air defence interceptors.What the military do need however is better vehicles for troops in Iraq & Afghanistan, New aircraft carriers and a non US type of aircraft to replace the Harrier.Oh and a pay rise for our troops wouldn't go un-appreciated!
D King, Camborne, UK
Luke of Perth Australia should read the history books to understand why we need an advanced and capable airborne weapon system, although we might not really need the last 88.
Tony , Tarleton, UK
What will the £5 billion be spent on? Diverted to fund more management consultants no doubt.
Our forces are crying out for additional investment and with a resurgent Russia I am amazed the MOD and Treasury are considering this.
Richard, Kingston upon Thames,
"Soviet" Migs for India? They must be very old in that case, so Typhoon should have a good chance!
Mike, Singapore,
instead of buying billions of pounds worth of killing machines, wouldnt it be nice if it was spent on securing social welfare and harmony for all of us. Military spending is ridiculous, brought on by a scare campaign from the white house, the same as what they did in the 80s with communism.what a joke, why do more intelligent countries like England and Japan continuously fall for white house lies in every generation?
luke, perth, australia
If you buy a brand new Ford Mondeo and immediately decide to sell it on, Ford would have no say in the matter. How is it that BAE Systems can prevent the RAF selling on any Typhoons that they have bought? Sounds like another MOD contract blunder, you would think they (the MOD) would have learnt to examine the small print by now!!
Mr L Bowman, Coningsby, England
It would be a simpler solution to remove the Ministry and its money from the JSF project, and find a cheaper alternative instead. There is a strong possibility that the project is to be further damaged by cancelling the preferred engine option of the British aircraft.
Does the Navy really need this unreliable and wildly expensive project? Further technical issues were announced with it only this week.
Roy Ellor, Salford, UK