No of Visiters


Thursday, December 13, 2012

F-35 deal scrapped as Conservative government begins new search for fighter jet

The federal Conservative government has formally pushed “reset” on its search for a new fighter jet after revealing that the Lockheed Martin F-35s they had picked would cost more than $600 million apiece to own and operate over their lifespan.

Battered by opposition criticism, sticker shock and with the sharp critique of the auditor general ringing in their ears, Conservative cabinet ministers confirmed Wednesday that they were starting fresh in their search for a jet to replace aging CF-18 Hornets.

fighter jet

“We have hit the reset button and are taking the time to do a complete assessment of all available aircraft,” Public Works Minister Rona Ambrose told reporters.

The F-35 Lightning II — the choice more than two years ago — is in the running but its purchase is far from certain, especially given the rising costs for the stealth fighter.

While the government has vowed to spend no more than $9 billion to buy the jets, a cost analysis reveals that Ottawa has set aside just $602 million in reserve funds to cover unexpected price hikes. That’s far short of the recommended contingency fund of $2.5 billion, the analysis by the accounting firm KPMG says.

Any increases in cost would force Ottawa to cut its jet order to stay within budget, leaving the Department of National Defence (DND) short of fighters.

“DND has advised that their risk mitigation strategy ... is to reduce the number of aircraft acquired,” the analysis states. “This could reduce the initial fleet to as low as 55 aircraft, which is below DND’s current stated requirements.”

On Wednesday, officials released an audit report showing that the “cradle-to-grave” costs of owning and operating a fleet of 65 F-35s would total $44.8 billion, a stunning price tag and far higher than any cost released so far.

Defence Minister Peter MacKay sought to put the eye-popping number in context, noting that it includes the cost of salaries and fuel, which in the past have not been lumped in with the price tag of new military gear.