MoD to offload fighter to avoid cash crisis The Ministry of Defence is attempting to offload a £5 billion order of Eurofighter aircraft to save desperately needed cash with British defence spending plans in chaos.
By Thomas Harding, Defence Correspondent
Last Updated: 12:00AM BST 21 Aug 2008
Secret negotiations have allegedly been taking place between BAE Systems and Saudi Arabia to double the current order of 72 Eurofighter Typhoons.
The MoD is looking to sell off its third tranche of 88 advanced fighters in order to save money for other major projects as the defence budget is facing an annual shortfall of an estimated £2 billion.
Defence industry sources have also suggested that there is "a real prospect" of two squadrons of about 48 Typhoons potentially being sold to Japan.
India has also been sounded out as an additional market to sell the aircraft with BAE in the running to win a £6 billion contract to replace the country's aging Russian fleet.
The RAF already has 144 Typhoons ordered and the third batch of fighters designed to meet the Soviet threat has long been considered unnecessary by defence planners.
With a significant shortfall in defence spending, that has come under severe pressure with the two wars in Iraq and Afghanistan, the MoD is desperate to cut some major projects.
Under a strict contract signed with the Eurofighter consortium the MoD would face paying huge penalties if it reneged on the 88 aircraft deal that would cost as much as actually buying them.
But the potential Saudi deal would offer the MoD a way out of the contract for Tranche 3 although the Eurofighter consortium has refused to confirm or deny that this is an option.
BAE has already invested £216 million in building the infrastructure for the first batch of 72 Typhoons to be delivered to the Royal Saudi Air Force.
With the Arab country's fleet of F5 Tiger and F15 Eagles fighters retiring soon there will be a significant gap in Saudi air defences especially as tensions with Iran continue.
The negotiations could prove controversial since BAE was investigated by the Serious Fraud Office (SFO) over bribery allegations connected to the £43billion al Yamamah arms deal.
But in a boost for the Government, the Law Lords last month ruled that the SFO had been right to call off its investigation into alleged corruption surrounding billions of pounds of British arms contracts with Saudi Arabia.
The MoD said it was "in discussions" with the Eurofighter consortium but "no final decisions have been made on Tranche 3".
"We will not comment on Government-to-Government discussions, even to confirm that discussions are taking place," a spokesman added.
In a statement BAE Systems said: "We are unaware of the MoD holding any discussions with other nations in regards to diverting any Tranche 3 Typhoon
Source
http://www.telegraph.co.uk/news/uknews/2591421/MoD-to-offload-fighter-to-avoid-cash-crisis.html
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