Dassault and the French Government are close to resolving a major problem over how to fund an earlier service entry of the air force version of the Rafale fighter, to meet export demonstration needs. Dassault had expressed considerable concern over the defence ministry delaying delivery of the air force Rafale until 2005.

Discussions centre on who would pay the Fr700 million ($140 million) interest charges needed to service the Fr4.5 billion cost of purchasing about ten Rafales for the French air force in time for service entry in 2001 instead of 2005.

Under the hoped-for arrangement, delivery of the first air force Rafales would occur in parallel with those of the navy version. The earlier service-entry date is seen as vital if the aircraft is to stand a chance of winning any of the fighter competitions in the pipeline, notably for the Emirates, which wants to order 80 strike aircraft and is considering the Rafale and Lockheed Martin F-16 Block 60.

Dassault needs the air force version to show the multi-role fighter's air-to-ground and air-to-air ability. The navy version is capable only of air-to-air operations.

According to sources, the two sides could arrive at a compromise by the end of the year, under which Dassault and its suppliers would pay "more than 50%" of the interest charges. A source stresses that the French Government supports the earlier in-service date, but is strapped by legal barriers preventing any purchase of defence equipment not covered in the current defence budget.

Source: Flight International