Aircraft carriers to cost £1.2 billion more
The Financial Times is reporting that the company charged with building the UK’s new carriers cannot build them to budget.
BAE Systems has told the Government that it cannot build the two aircraft carriers for the £2.8 billion it claimed in January. The company now believes that the two ships will cost £4 billion, the FT reports.
The Financial Times claims that as there is no extra money available, the Navy will have to consider accepting smaller, less sophisticated ships. The ships could be reduced to carrying just 20 of the new F-35 Joint Strike Fighter instead of 45 aircraft that is being designed in partnership with the US.
The Liberal Democrat Shadow Defence Secretary, Paul Keetch called on the Defence Secretary, Geoff Hoon to make a statement on what the Government intends to do about the shortfall.
Mr Keetch highlighted that the Government’s Strategic Defence Review has been damaged by the failure of equipment before the military campaign in Iraq.
Mr Keetch commented, “The new carriers are the cornerstone of the SDR and the expeditionary strategy. With downgraded carriers, the SDR falls. A clear statement of intent from Geoff Hoon is required. Will he downgrade the carriers, pay the extra money or lean on BAE to deliver to specification, on time and on budget?”
BAE won the contract for the ships after strong competition from the French company Thales. However, the Government had to pay £700 million to BAE Systems after cost overruns on the Nimrod maritime patrol aircraft and Astute submarine projects.
The Financial Times claims that the overrun for the aircraft carriers contract is due to the fact that BAE Systems has to build the ships to Thales’ design.
