Mrt 23 2012

Norway: less F-35s, 85% higher price and later final decision

Gepubliceerd door om 15:44 onder Global F35 News

Oslo - Today the Norwegian Ministery of Defense presented their military long term plan. Norway didn’t sign any contract of the F-35 after their 2008-evaluation, but is planning to order now 42-48 JSF, in addition to 4 JSF for training. The previous plan from 2009 was to order a total of 56 aircraft during 2016-2021. In 2010 the purchase was pushed two years into the future, in 2018.
Due to price increases the estimated cost is now US$ 10,4 billion (NOK 61 Billion) for 52 jets (average price US$ 199 million). This includes weapons (and development cost for the JSM weapon), and logistics. In 2008 the Gripen NG was considered as too expensive; however the price of the F35A is much higher(plus 85%) now than predicted in 2008 with less industrial compensation orders.

The Norwegian Air Force is planning now for the delivery of 4 trainers during 2015 and 2016. The rest will be delivered from 2017 to 2024, and not 2018 to 2021 as previously planned. A final decisionfor the 4 training aircraft will be made in 2014. After 2014, year by year an evaluation will take place and based on the actual developments and price and a new decision will be made about more purchases.
The F-35A’s will be based on Evenes AFB; some 5,1 billion NOK (US$ 867 million) will be needed to make this airbase available for F-35 operations. The current airbase Bodo can not be used for F-35A operations, due to environmental (noise) issues.

Summary of changes:
In 2008 (Norwegian Airforce Projectteam Replacement F-16)
Total investment: 18 billion NOK (US$ 3,1 billion)
Average price: US$ 58,8 million

In 2008 (Norwegian Government, auditor):
Planning: 56 aircraft
Average price: US$ 126,8 million (including weapons, training)
Total investment: 42 billion NOK (US$ 7,1 billion)
Total lifecycle O&S cost: 145 billion NOK (US$ 24,6 billion)

In 2012:
Planning: 46-52 aircraft
Average price: US$ 234,6 million (including weapons, training), plus 85% higher
Total investment: 72 billion NOK (US$ 12,2 billion)
Total lifecycle O&S cost: 230 billion NOK (US$ 39,1 billion), plus 58% higher

Comparison with competing offer:
In 2008, binding offer SAAB Gripen, guaranteed by Swedish government (considered as too expensive by Norwegian Government):
Planning: 52 aircraft
Total investment: 24 billion NOK (US$ 4,1 billion)
Average price: US$ 79 million
Total lifecycle O&S cost: 60 billion NOK (US$ 10,2 billion)
100% (minimum) guaranteed industrial compensation orders.

Industrial value:
Estimated “industrial opportunities” of 60-70 billion NOK (US$ 10 billion) in 2008 during the next decade.
Until now only 2 billion NOK (US$ 340 million) was contracted in signed and real industrial contracts. this means, 10 years after the start of the project (SDD-MOU signed in 2002) only 3% of promised value has been signed as fixed contracts.
In 2008 Saab guaranteed a minimum of 100% industrial value of compensation orders to the Norwegian industry.

Source: Multi Year Planning Norway Defense 2012 (PDF)”

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