The UK Ministry of Defence could abandon its planned £13 billion ($23.9 billion) private finance initiative (PFI) deal for a fleet of Future Strategic Tanker Aircraft (FSTA) in favour of a direct purchase, after four months of negotiations failed to resolve concerns over programme costs. "There is now little prospect of securing an acceptable PFI outcome," wrote UK chief of defence procurement Sir Peter Spencer to the AirTanker consortium in a 10 June letter obtained by the Financial Times. EADS-led AirTanker on 24 June submitted a detailed response to Spencer's letter, which had threatened the project's immediate cancellation unless it moved on key aspects of the project. "We will look at the response to inform our thinking on how to advance with this project," says the MoD.

Source: Flight International