Beaucoup des MRTT pour France

[JFZ90]

Looks like France might be buying 14 MRTTs.

http://www.opex360.com/2012/10/20/m-le-drian-annonce-la-commande-de-14-avions-ravitailleurs-a330-mrtt/

It would be interesting to see how the total costs will compare to Airtanker.

Do you think they are buying 14 as its one more than 13? :E

[Finnpog]

That is buying them, as opposed to Paying For it Indefinitely.

[Archimedes]

It would be interesting to see how the total costs will compare to Airtanker.



The word 'favourably' springs to mind...

[Buster Hyman]

On the basis of previous orders for this product and passed by the United Kingdom and Australia, the amount of such a contract could amount to 2.4 billion euros, the unit price of an A330 MRTT is 175 million. The first deliveries expected to take between 2017 and 2024, according to a report by the Court of Auditors published last July.
A saving of 20 million Euro over the RAAF price but, in fairness, they are buying almost 3 times the amount of airframes.

[Rosevidney1]

A most sensible decision by our French friends. Would that we have the gumption to do as they.

[BBadanov]

Airbus has been expecting this order for 14 A330-200 MRTT for at least the last 5 years. Probably has been delayed due the European economic situation.

[tornadoken]

You do know, don't you, that Nations do PFI for 2 reasons? One is to shift the upfront capital outlay off this year's taxes. ("Off balance sheet"). That is a very good thing.

The other is to specify the workscope of lifetime ownership; to fix-price it (maybe subject to a general escalation/currency parity ratchet); then to shift all non-Front Line labour (="back-office" functions) off-Public Sector employment. That is a very good thing. Do not waste uniformed personnel on work that hire-and-fire civvies can do.

Do not attempt to compare the acquisition price of (an A330MRTT) with a 30-year buy+operate number.

The only folk who object are Public Sector Unions. Yes, a balance sheet needs capital service (interest+profit) at a rate higher than Treasury cost-of-borrowing. That might be offset by commercial-sector efficiencies. But reducing this year's outlay from 100% of capital cost to one-thirtieth-plus interest/profit remains attractive.

[BEagle]

If PFI for national defence is such A Good Idea, why have no other major powers opted for it?

The concept is utter bolleaux for military requirements. It will inevitably cost the tax payer more in the long run.

[Roland Pulfrew]

It's just another sign of the times. The UK used to have the largest fleet of tankers in NATO/Europe after the USAF. With this French order we are relegated to 3rd.

I understand that the MOD's financial advisers to our PFI said "we can understand PFI for a building, or even infrastructure, but for something as important as a frontline capability???" And with PFIs you will always get to the point where the contractor says "it's not in the contract guv. That's going to cost more" so costs inevitably grow!

And as to off balance sheet; that is just more smoke and mirrors. Does it really matter if an item is on the balance sheet? This is government we are talking about. Yes by all means have a process to understand what you own and ensure that you don't own stuff you no longer require, but having watched the wholesale sell off of equipment and spares in the last decade because IPTs were frightened by the cost of capital charge, the taxpayer did not get value for money. Remember the MOD selling off kit it didn't "need" to avoid paying RAB charges, depreciation and cost of capital charges, only to buy it back at vastly inflated prices when we realised we did need it after all. The taxpayer paid TWICE for the same bit of kit; not great VFM.

I was once told by a VSO that the accountancy world come up with a new best way of business practice once every ten years or so. Government adopts the process as "best practice" without fully understanding it (or its implications). You have to hire accountants to explain and guide you through it, you start to understand it and work with it, you no longer need accountants and lo another bit of best practice is formulated and the cycle begins again. Mid 90s and the New Management Strategy; mid 00s and RAB/PFI; mid 10s - standby!:ugh:

Sorry tornadoken, it's not just the unions that thinks PFI is bolleaux. I know of very few people that think it works or is cost effective; unless of course you are a PFI provider when you are probably rubbing your hands with glee.

[Finnpog]

Tornadoken, whilst the view which you wrote of PFI might be yours, it seems to me to be woefully naive to suggest that (a) it is good and (b) it is only public sector unions which dislike it.

Certain people try and 'pretend' that it is like a mortgage, for both the goods and the services. Well, it clearly is not - as after a mortgage you own the thing at the end. It is a high cost rental scheme - in which any change to the terms of the contrcat get punished by exorbitant extra charges.

Also the idea of hiding financial commitments off budget sounds a lot like fraud to me, as a muggle, accepting that there is probably a legal 'vehicle' to allow it.

It is in the interest of the supplier to view the initial tender as a 'loss leader' so that it looks to morons to be a cheap deal, and if you only want that specific service as specified, then the customer might be OK (as long as you have nailed the spec down - so that lightbulbs can be bought in bulk from a normal supplier, rather than from a wholely owned subsidiary of the parent company who then charge a 'management and administration fee' on top of the normal purchase price).

But, for example, say that you wanted to have more sorties than you specified initially; or wanted to kept the jets in service a little longer; or changed your branding / colour scheme... Then all of these might attract extra fees (these are just possible examples - I do not know the detail of all of the small print - particularly the tanker deal).

None of that means that the folk working on the scheme are not some of the best guys and girls in the industry, just that they work for a profit making company that is trying it's hardest to make money.

What it does mean for the customer though, is once you have signed, then you will be paying for it. Oh, and another thing...when the deal is up - who is in the market to provide the replacement?