TC...empathise with much of what you say..its all entirely plausible...coupled with the (changed) assessment of Soteria's bankers concerning what you have said. A PFI's bankers worry more about the risks at all levels than even the customer! While the risks you talk of are to some extent intangible..they are the very sort that frightens the banking horses. Not withstanding the DfT/CG issues you noted....the very involvement of a high proportion of mil aircrew sent a clear commitment message which reassured those in the banking community...suggesting that HMG would always stand behind the programme..sometimes for unforeseen political reasons that can never be enshrined in a contract..and from what has been rumoured, was about to disappear.
As you say, all these issues have undermined the very solidity the customer was looking for in any bidder's bid construct giving Soteria no choice but to identify their concerns......or maybe it was nothing about this at all, but rather some very inappropriate goings-on in the bid process (I hope not!)
.....I gather the local rag in North Devon today quotes Min AF (the local MP) as saying "there may have to be a rebid"....although he says nothing of the cause....hopefully we will all hear more soon.
Given what's happened elsewhere in departmental budgets, its hard to believe that what will replace it will not be as shiney and expensive which by definition means either something smaller and radical (Mmmm unlikely) or a much truncated version of what we have in order to keep costs under control.