Another reason why we need to keep the GR4. tell me again how many swing-role Tranche 3A Typhoons the RAF is going to have if Tranche 3B is cancelled?
FT:
Jet deal blows £400m hole in MoD budget
The Treasury has stepped in to save the Ministry of Defence from a black hole of about £400m in its annual budget, after officials prematurely booked the proceeds from a planned sale of Eurofighter Typhoon jets to Oman. Ministers were dismayed to discover the over-optimistic accounting of the export deal, which had threatened to make it even harder for the department to meet tight budgets.....
The problems arose from MoD officials under Labour wrongly assuming Oman would make a payment of at least £400m this year. A Treasury concession now gives the MoD leeway to recognise the sale at some point over the next four years. “It does again show that the culture of optimism has all sorts of risks for the MoD,” said one senior defence figure. It showed “there needs to be a new culture of realism, not cross my fingers and hope for the best”......
The MoD is now reliant on exports – to Oman and Saudi Arabia among other destinations – in order to balance its books and meet its commitments to purchase jets under the Eurofighter consortium, which includes Spain, Italy and Germany.
In April Gordon Brown announced he was in talks to sell jets from the second Typhoon production run to Oman. This prompted officials to book the sale proceeds, even though the deal was far from complete. It was flagged up to ministers as one of the “top financial risks” to the MoD, forming part of what was an estimated £38bn shortfall over the next decade. The sultanate later approached Liam Fox, defence secretary, requesting to buy jets from the third batch of more sophisticated and expensive Typhoons, a change that is likely to significantly delay the final payment.
“We are examining the consequences of the decision the Omanis are going to take. There are some issues around that,” said one senior defence figure. “We are getting close to clarity on the Oman deal. But the likelihood of it appearing in this year’s budget is small.”
Under the Eurofighter agreement the UK is signed up for 40 aircraft from the third production run, although it was also allowed to count export orders to countries including Saudi Arabia towards its total so it only had to pay for 16 aircraft. Defence industry analysts say the Omani order could be for as many as 24 aircraft, as Oman has wanted to replace its 24 ageing Jaguar jets for some time.