Prague Government needs strong financial package to entice it to proceed with its sole-bidder fighter 'contest'

Saab-BAE Systems has offered the Czech Republic a novel financing package as part of its offer to sell the Gripen to Prague.

The company is the sole bidder following the withdrawal of Boeing, Dassault Aviation, EADS/Eurofighter and Lockheed Martin (Flight International 29 May-4 June).


The Czech Government has been offered a package spreading payments for 24 to 36 aircraft over 15 years and pegging payment at less than 5% of the contract value at the time of the first deliveries, scheduled for 2004. Saab-BAE is also offering a commercial loan for 15% of the contract value at "attractive interest rates" to replace "more expensive loan facilities".

Julian Scopes, BAE managing director Europe, says typically 25% of the value is used as a deposit with 95% of an aircraft's price paid before hand-over, the rest on aircraft delivery. Similar terms have been offered to Hungary and Poland.

Scopes says 36 aircraft and a spares, logistics and training package for three years of operation will cost "substantially less" than CKr75 billion ($1.86 billion). The Czechs are budgetingCKr100 billion for the programme.

A key requirement is to first allow the Czech defence ministry to pay for the 72 Aero Vodochody L-159 light strike aircraft it has on order, and which are consuming most of the defence procurement budget, as well as afford other upgrades demanded by NATO.

The Czech Republic is being offered a role in future Gripen enhancement programmes and the option of fixed price per flying hour depot level maintenance.

Saab-BAE is also offering commonality between the L-159s and the Gripen by clearing additional weapons that are standard on the Czech aircraft, such as the Bristol Aerospace CRV7 rocket. It also says that air force L-159 engine maintenance facilities could support the Gripen's VolvoRM12.

Despite being the lone competitor, Saab-BAE has yet to convince the government to continue with the programme.

The government is expected to complete its evaluation by September, before deciding if the procurement will proceed.

Source: Flight International