Further cost overruns for the Rafale multirole fighter programme are threatened if production levels are not maintained throughout the procurement period, says a new report on French defence spending.
The report, prepared for the National Assembly finance commission, says the Rafale has arrived at a "crucial stage". It claims that government approval of a firm order for 28 aircraft plus 20 options in June 1999 "had better be continued" by future governments if further cost overruns are to be avoided during the planned 2003-15 timescale for delivery of all 294 aircraft.
Budget delays by successive governments, lack of cost control, unplanned modifications and a reduction in the total requirement from 320 aircraft have all engendered "considerable financial consequences", says the report. Development costs have risen by 30% since the programme was launched in 1989, it says. "Half of these occurred between 1988 and 1995, when cost controls were insufficient and contracts had neither cost limits nor constraints on series production timing". The other half came from the "substantial modifications" to specifications and programme stretches.
The report says that specifications continue to change. The navy has decided recently to develop a two-seat version at an additional cost of Fr1.8 billion ($235.8 million).
Development of the three initial versions of the Rafale cost Fr60 billion, with industry providing a quarter share, while total production costs are estimated at Fr148 billion. The report notes, however, that by the end of 2000 only five Rafales will have been delivered against the 137 called for in the 1984-88 defence budget.
The report reveals there is a dispute between Dassault and the government over financing for the F2 version, due for service entry in 2004-5. The F2 will have full air-to-ground capability and is the basis for an export version. Dassault agreed to provide 25% of F2 funding, which the report says is equivalent to the estimated Fr3.5 billion cost of developing the export version.
The manufacturer contends, however, that the three year delay in delivery of the first aircraft, to 1999, lost it precious time in the export market. The report says Dassault "cannot assume the cost of developing both the F2 and export versions".
Source: Flight International