FSTA - Cancel PFI and buy outright?
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FSTA - Cancel PFI and buy outright?
I was laughing while reading the FSTA humour thread, and not wanting to subvert that thread, a question came to mind:
Would it be preferable to admit that the PFI is a crock, and take the MOD's option of withdrawing before the contract is let (knowing that it would impose a huge delay on fielding the replacement AT), or let it proceed on the basis that the ISD will be sooner than starting again, even though it's far from perfect?
If the decision is taken to show the door to the PFI, all the world's remaining Tristars could be bought up (for not very much), and used to prop up the fleet, I suppose.
It seems similar (to me) to the decision to can Nimrod AEW3 and buy E3. A tough decision, and also forced the Shacks to soldier on, as there was nothing else to do the task.
Is it better to bite the bullet now, or allow the PFI to proceed, and spend the life of the contract biting the bullet?
Would it be preferable to admit that the PFI is a crock, and take the MOD's option of withdrawing before the contract is let (knowing that it would impose a huge delay on fielding the replacement AT), or let it proceed on the basis that the ISD will be sooner than starting again, even though it's far from perfect?
If the decision is taken to show the door to the PFI, all the world's remaining Tristars could be bought up (for not very much), and used to prop up the fleet, I suppose.
It seems similar (to me) to the decision to can Nimrod AEW3 and buy E3. A tough decision, and also forced the Shacks to soldier on, as there was nothing else to do the task.
Is it better to bite the bullet now, or allow the PFI to proceed, and spend the life of the contract biting the bullet?
Were anyone stupid enough to drag ancient TriShaws out of the desert, no doubt the FSTA bidders would cry foul - such an option was denied to them years ago.
PFI is, however, a crock as you say!
PFI is, however, a crock as you say!
Whilst not disagreeing in the slightest that this PFI is a crock of smelly stuff, I think if the MOD canned it at this stage the resulting litigation would keep my sort gainfully employed for many a year and cost the MOD a small fortune.
On top of that you'd then have to go out and fund the purchase of the aircraft, the in life support, the training, the specialist refeulling kit, the conversion, the spares support etc etc etc etc. All of which was supposed to be paid for through the 27 year life of the PFI.
Can't have it both ways.............................
On top of that you'd then have to go out and fund the purchase of the aircraft, the in life support, the training, the specialist refeulling kit, the conversion, the spares support etc etc etc etc. All of which was supposed to be paid for through the 27 year life of the PFI.
Can't have it both ways.............................
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Can't have it both ways.............................
Hellbound
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Think that no matter what the rights and wrongs of PFI are, fact is there is no cash in the bank for a capital outlay. That was given up years ago when they decided there was no requirement for AAR. Unless we give something else up or Gordon sells an oilfield or 2 there is no money and borrowing is the only way...
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Add this into the equasion as well!
Air tanker fleet is hit by credit crunch
Defence Minister Goes Racing
Air tanker fleet is hit by credit crunch
The government had expected the loans to cost 50 basis points (half of 1%) over Bank rate, but the banks wanted a full 1%, with an option to increase the interest if market conditions changed.
Hellbound
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We were all mystified. T'was many years ago and I don't recall the whos/wheres/whyfores but I am sure it is covered on another FSTA/PFI thread. Do a search if you need the detail...
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Reading between the lines of the ToL article it seems that some UK banks are fearful that the government will be financially as well as morally bankrupt then. Maybe Drayson has a finely tuned sense of self preservation?
Hellbound
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Yep, and that was after the money had been taken IIRC.
Bottom line is, no matter why there is no funding line to replace VC10 and the mighty big white party bus, there is no funding. To get the capability we need to:
1. Get extra money from treasurey, errrrrrrr unlikely methinks.
2. Offset other funds from the MoD budget to fund it, errrrrr anyone want to give up a coupla billion?
3. Come up with some fantasy, half-arsed way of getting someone to provide it to us.
No matter how difficult 3 is, no one will consider 1 or 2 again unless 3 is proven impossible...
Bottom line is, no matter why there is no funding line to replace VC10 and the mighty big white party bus, there is no funding. To get the capability we need to:
1. Get extra money from treasurey, errrrrrrr unlikely methinks.
2. Offset other funds from the MoD budget to fund it, errrrrr anyone want to give up a coupla billion?
3. Come up with some fantasy, half-arsed way of getting someone to provide it to us.
No matter how difficult 3 is, no one will consider 1 or 2 again unless 3 is proven impossible...
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I don't blame Lord Drayson for following his dreams, or Square Wheels Filbey for taking a lucrative job post RAF career; we can all knock them but I bet most of us would do similar given the chance. As for the thread - I'm no economist but even I can clearly see that the PFI is a terrible idea and a dreadful waste of taxpayers' money. But buying outright is probably not an option either. So perhaps the question should be 'is there a realistic alternative?'
Given the opportunity I would investigate the benefits, if any, of changing the contract, that has not yet been signed, to make the agreement a lease-to-buy. Without looking into it I don't know if it's possible, but leasing to buy might appease those of us that don't like to just rent the aircraft, might persuade the treasury to find that extra half a percent and might still leave Airtanker with an agreeable profit margin. Maybe we could all be happy after all?
Given the opportunity I would investigate the benefits, if any, of changing the contract, that has not yet been signed, to make the agreement a lease-to-buy. Without looking into it I don't know if it's possible, but leasing to buy might appease those of us that don't like to just rent the aircraft, might persuade the treasury to find that extra half a percent and might still leave Airtanker with an agreeable profit margin. Maybe we could all be happy after all?
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Please let's not raise the spectre of extra TriStars. We would be even more heavily dependant on Marshalls - who make BAE Systems look good. I remember a few years ago they quoted the cost of turning a $1m TriStar into a just a truck for the RAF as around £25m each.
I suspect that the Herrick airbridge will become the main motivator for the FSTA programme, with the AAR capability taking a back seat. It would be wrong, but not surprising, if this allowed some of the contractual obligations on AAR to be waived. The aircraft is already in just about the lowest AAR spec it is possible to have and the RAF could easily end up with another generation of botched tankers.
Contrast this programme with KC-X - the USAF's highest procurement priority. They know how crucial tankers are to any air campaign and their Generals seem to be interested in the actual capability and not just the cost.
I suspect that the Herrick airbridge will become the main motivator for the FSTA programme, with the AAR capability taking a back seat. It would be wrong, but not surprising, if this allowed some of the contractual obligations on AAR to be waived. The aircraft is already in just about the lowest AAR spec it is possible to have and the RAF could easily end up with another generation of botched tankers.
Contrast this programme with KC-X - the USAF's highest procurement priority. They know how crucial tankers are to any air campaign and their Generals seem to be interested in the actual capability and not just the cost.
Think that no matter what the rights and wrongs of PFI are, fact is there is no cash in the bank for a capital outlay. That was given up years ago when they decided there was no requirement for AAR.
I think you may be confusing a few issues with that statement. AAR is the primary role of FSTA (note strategic TANKER aircraft). What I think you are confusing is that fleet sizing for FSTA never took into account the AT role. FSTA was fleet sized on the UK military AAR requirement. The beancounters (DCRS - not sure what they are called today) always stipulated that the AT role would be done by FSTA if "value for money" could be proven but couldn't be used for fleet sizing. This was when certain woolley thinking within 2 Gp/DSTL and MOD assumed that AT would always fly into benign environments and therefore could be chartered......Doh!!
When the Govt decide that AAR could be PFI'd the funding line for a purchased replacement was diverted to other programmes - Doh! So now there is no chance that we could procure a replacement unless there is a MASSIVE increase in Defence spending. A procured replacement of 17 KC30s is circa £2.5B!!!!!!!!!!
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Guide me pls on why PFI, inherently, is a crock of poo? Is your objection that you prefer to own title in kit? What does that matter? Or do you assume civilian involvement in the operation will screw it up?
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In days gone by we bought the kit and tried hard to turn it into capability. Kit is pretty, but is not itself of military value. PFI leaves ownership with the Provider, who may take it away when we're done with it and find residual value, where we junk things in Wales. Till then he gives us hoses dangling in defined places and times in the sky. We don't care how he does it, and don't pay him if he doesn't.
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You may respond that he very likely will not be there, where and when wanted. What makes you think an all-uniformed set-up, kit owned outright, would deliver airliner-types on task better than a joint operation? See: LTU TriStar 500: a fleet of 2 aircraft sustained daily Dusseldorf-Los Angeles, a 23 hour rotation, >15 years. >4,000 hr utilisation, p.a/c, p.a. Or, for the oldies, see Dan Dare putting more hours on Comet C.4 in 5 years than RAF had in 13. Sure, they had 5 crews p.a/c, bits sitting on Main Base, flight spares kits, pack-ups at frequent ports, and an Approved Maintenance Schedule tailored to the needs of the operation. But that's the whole point.
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Upfront capital outlay is part of the thinking. But you are another: uniforms are precious. You, alone, go in harm's way. You command more skill and resource than Grandpa-pilot ever did. Any task that can be competently discharged by a civilian should be. Same thinking as Teaching Assistant, Nursing Technician, Community Support Officer (those mini-Plods). Good thing, surely?
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If you think PFI is dearer, do a quick sum: Commander, cost per flying hour-in-command (or hour-on-shift, SEngO, or Logistician, or any uniform...)from Officer Selection Centre, net of wash-out, through active career, on through the >30 years you intend to draw pension.
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In days gone by we bought the kit and tried hard to turn it into capability. Kit is pretty, but is not itself of military value. PFI leaves ownership with the Provider, who may take it away when we're done with it and find residual value, where we junk things in Wales. Till then he gives us hoses dangling in defined places and times in the sky. We don't care how he does it, and don't pay him if he doesn't.
.
You may respond that he very likely will not be there, where and when wanted. What makes you think an all-uniformed set-up, kit owned outright, would deliver airliner-types on task better than a joint operation? See: LTU TriStar 500: a fleet of 2 aircraft sustained daily Dusseldorf-Los Angeles, a 23 hour rotation, >15 years. >4,000 hr utilisation, p.a/c, p.a. Or, for the oldies, see Dan Dare putting more hours on Comet C.4 in 5 years than RAF had in 13. Sure, they had 5 crews p.a/c, bits sitting on Main Base, flight spares kits, pack-ups at frequent ports, and an Approved Maintenance Schedule tailored to the needs of the operation. But that's the whole point.
.
Upfront capital outlay is part of the thinking. But you are another: uniforms are precious. You, alone, go in harm's way. You command more skill and resource than Grandpa-pilot ever did. Any task that can be competently discharged by a civilian should be. Same thinking as Teaching Assistant, Nursing Technician, Community Support Officer (those mini-Plods). Good thing, surely?
.
If you think PFI is dearer, do a quick sum: Commander, cost per flying hour-in-command (or hour-on-shift, SEngO, or Logistician, or any uniform...)from Officer Selection Centre, net of wash-out, through active career, on through the >30 years you intend to draw pension.
tornadoken
I'll have what you are drinking!!
How much time do you have?
Firstly, we provide the crews and the majority of the techies. Why? Because, strangely, civvies don't like to go to the frontline that much unless you pay them lots. Therefore cheaper to keep military personnel. Secondly, because military personnel are inherently more flexible (well they used to be before child care and ......) therefore more likely to be available when you need them, even if that is for fireman's strikes, foot and mouth etc etc.
Thirdly, because we will always own the operational risk. Fourthly because Air Tanker will not be as flexible as the military AT & AAR fleets and crews because it isn't in the contract or we will have to pay more to get it in the contract. Next, I can't remember where I got to, there will be no residual value apart from scrap, once we have finished with the fleet - just like the VC10 and Tristar. Because you are mortgaged to the hilt with PFI; the programme will work out at an average of £500M per year through life. You can buy an awful lot of crews, spares, and aircraft for that. And before I burst a blood vessel, because AirTanker are in it to make a profit - which comes from the Defence budget and could be providing capability elsewhere.
And relax!
I'll have what you are drinking!!
How much time do you have?
Firstly, we provide the crews and the majority of the techies. Why? Because, strangely, civvies don't like to go to the frontline that much unless you pay them lots. Therefore cheaper to keep military personnel. Secondly, because military personnel are inherently more flexible (well they used to be before child care and ......) therefore more likely to be available when you need them, even if that is for fireman's strikes, foot and mouth etc etc.
Thirdly, because we will always own the operational risk. Fourthly because Air Tanker will not be as flexible as the military AT & AAR fleets and crews because it isn't in the contract or we will have to pay more to get it in the contract. Next, I can't remember where I got to, there will be no residual value apart from scrap, once we have finished with the fleet - just like the VC10 and Tristar. Because you are mortgaged to the hilt with PFI; the programme will work out at an average of £500M per year through life. You can buy an awful lot of crews, spares, and aircraft for that. And before I burst a blood vessel, because AirTanker are in it to make a profit - which comes from the Defence budget and could be providing capability elsewhere.
And relax!
I don't own this space under my name. I should have leased it while I still could
I think I know what Southbound was alluding to.
Was it not argued that FSTA could be used for commercial transport operations and only called in, and role fitted, for AAR should the need arise.
The need was to sustain Typhoon caps in the North Sea.
I am sure BEagle will be able to refresh our memory.
This entry is interesting as well:
http://en.wikipedia.org/wiki/Future_...anker_Aircraft
Was it not argued that FSTA could be used for commercial transport operations and only called in, and role fitted, for AAR should the need arise.
The need was to sustain Typhoon caps in the North Sea.
I am sure BEagle will be able to refresh our memory.
This entry is interesting as well:
http://en.wikipedia.org/wiki/Future_...anker_Aircraft
Hellbound
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Don't think I am confusing anything. It is a PFI because there is no money, it was never a PFI to free up cash for something else. There is no money because the line for a replacement AAR aircraft was taken out of the EP many years ago.
Beags, come and rescue me before they stone me!
Beags, come and rescue me before they stone me!