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Author Topic: Dutch Publish Price Estimates for Eurofighter, Rafale  (Read 7911 times)

Offline tigershark

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Dutch Publish Price Estimates for Eurofighter, Rafale
« on: April 11, 2008, 04:16:43 AM »
     
Dutch Publish Price Estimates for Eurofighter, Rafale
 Posted by Joris Janssen Lok at 4/9/2008 11:52 PM CDT

If the Netherlands would order Dassault Aviation Rafale or Eurofighter Typhoons, it would have to pay up to 207 million euros ($327 million) per Rafale aircraft, and at least 112.5 million euros ($178 million) per Typhoon aircraft, the country's defense ministry has communicated to the Parliament in The Hague.

However, neither the required Rafale Standard F4 nor Eurofighter Typhoon Tranche 3 versions are currently available, and it is unsure how and when these will be developed, the ministry adds.

Both fighter types are alternative candidates to meet a requirement for a next-generation fighter aircraft to replace the aging Lockheed Martin F-16AM/BMs operated by the Dutch.

The Netherlands is committed to Lockheed Martin's F-35A Joint Strike Fighter, being a Level 2 partner in that program and being close to ordering its first two F-35As for testing.

However, some factions in Dutch politics still prefer a European fighter type to be selected. The statement by the ministry appears to underline the high cost associated with these.

For Rafale, the Dutch ministry says France (so far the only customer) has a requirement of 294 aircraft, to be delivered by 2019. It points out funding for the Standard F4 upgrade development is not secure, even though a possible Libyan order for  13-18 Rafales (value: 3.24 billion euros) is being discussed.

"Based on the possible order from Libya, the Rafale's unit price will be between 150-207 million euros, although the configuration and cost specification is unclear," the ministry says.

As for Eurofighter, the Dutch ministry tells its Parliament that at present, the UK requires 232, Germany 180, Italy 121 and Spain 87, while Saudi Arabia will acquire 72 from the UK and Austria has reduced its order from 18 to 15 (Tranche 1) jets.

The ministry underlines the delays in the Eurofighter development program. The Dutch would want the Tranche 3 version but, says the ministry, "deliveries of Tranche 2 have already been delayed from 2006-2010 to 2008-2015 and it is uncertain if there will indeed be orders for Tranche 3 aircraft."

The ministry says that earlier, Eurofighter had said it would make agreements with the Eurofighter partner nations for Tranche 3 development in 2007, for deliveries in the 2010-2015 timeframe. This has not happened.

The Dutch say that in 1999, Eurofighter was offering the Netherlands a per-aircraft price of  57.4 million euros, but that Saudi Arabia is now having to pay 8.1 billion euros for 72 Tranche 2 aircraft (112.5 million euros per aircraft) -- roughly equal to what Austria is paying, according to the ministry.

But it is "unknown" what the Austrians and Saudis are getting for this, and an eventual Tranche 3 variant will likely be even more expensive, Dutch MoD sources suggest.

Link
http://www.aviationweek.com/aw/blogs/defense/index.jsp?plckController=Blog&plckScript=blogScript&plckElementId=blogDest&plckBlogPage=BlogViewPost&plckPostId=Blog%3a27ec4a53-dcc8-42d0-bd3a-01329aef79a7Post%3a8a9d93c8-8a67-45a1-a2be-6b29037b3aa7

Offline Globetrotter

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Re: Dutch Publish Price Estimates for Eurofighter, Rafale
« Reply #1 on: April 12, 2008, 02:12:49 AM »
 :o :o THOSE PRICES ARE CRAZY!!!!!!!!! :o :o
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Re: Dutch Publish Price Estimates for Eurofighter, Rafale
« Reply #2 on: April 13, 2008, 01:00:29 AM »
Instead of running a proper tender, and issue Request for Proposals from the supplier, the MoD just wants to make sure it gets the JSF so it makes its own price calculations for the possible alternatives. An effort to stop parliament from even requiring them to have a serious look at them. Although I think most parties not agreeing with the JSF purchase, would actually be happy with new F-16s, or better yet no fighters!

The Rafale calculation is based on the Libya proposal, as you see for only 13-18 aircraft. With 85 aircraft the unit cost will be undoubtely be lower (less overhead per aircraft probably), plus you have way more negotiating power. Plus we have alternatives, Libya really hasn't until the US cancels the embargo. The French have yet to sell the Rafale, imagine what kinda deal could be forged if you would buy 85 from them. If they cost 60 million Euros to produce (2004), maybe 80 million now, anything above that should already be a great relief to France. It's almost like subsidizing France. It's ridiculous to think that they should let us pay the same as Libya, first and foremost because such a cost figure can never ever compete with 'our' alternatives.

The Eurofighter again is considered from a off-the-shelf perspective (but this time it does make more sense than previously). What would it mean for the Tranche 3 if we would raise the requirement by 85 aircraft. It can't be cancelled then and we could still get a development share, taking up the share possibly dropped by Italy or Germany. Both the Saudi and Austria cases can be questioned with regards to how these deal materialized. Anyway, Austria is again a small order. And with Saudi ties with the UK, it's hardly any benchmark for a Dutch Eurofighter deal. Regarding negotiation power, let's say we would want Eurofighters, what will this mean for the Danish and Norwegian and eventual Belgian decision. There could be a Eurofighter powerhouse! 2030-2040 we can collectively carry out a mid-life update, cutting the cost of life-time costs per unit.

Unfortunately they don't say what they expect to pay for the JSF, but I sure hope they are no longer with working with the US$45 million figure anymore, nor the ROI based on estimated production of 4500 units. Taking the Eurofighter case from 57 million euros in 1999 to 113 million euros now, that's like a 100% increase, but somehow I'm convinced that the same has already happened to the JSF price, without having entered production!

Also both alternatives are criticized for development delays and uncertainty regarding T3 and F4. But at the same time, it seems there's no concern whatsoever of what a baseline F-35A model for export countries will look like. I bet it has to go thru several Blocks and Upgrade cycles before it becomes what leaders envisage it to be. No problem, but now how will that translate into unit costs.

Anyway, it's too late now anyway. The MOD/AF has set their eyes on the JSF and with the industry and air force involved in its development it makes little sense to switch to another option now. And perhaps rightly so, for warfighter capability (especially if we plan to wage war alongside the US anyway instead of EUFOR) and secondly if this US recession (or at least the US-EUR exchange rate) will carry on like this, the JSF might even become cheaper than the Russian aircraft by 2015! But what happens if the tide turns and USD 100 M translates to EUR 150 M, then the Eurofighter looks pretty cheap.  :P

Summarized, it's a poor parlementary report aimed only at convincing parliament of the JSF choice made previously. Don't give it too much credit. They are all equally expensive in one way or another.

Even though the JSF will probably turn out to have been the right choice (as with the F-16 previously), I'm so agitated about this whole issue because of the way these things are done. I just feel that even some third world countries have better defence procurement processes in place!?
For example, we established an urgent need for more Chinook helicopters, they were like ah good Boeing has the CH-47F now, that's the best we can get, let's get some. Hold on, it's pretty expensive, well, then we'll postpone the purchase and wait a bit longer. Hmm, I thought we needed more Chinooks now?
We needed more Hercules planes, the C-130J was deemed too expensive and would come too late... now we're waiting for some ancient desert airframes to be overhauled and upgraded by a UK company... by the time they're done, the existing H models also need an upgrade (and probably overhaul)... we might as well have bought the C-130J, and swap in our H models for J models as well.

Just my two cents...
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