SA’s Airbus A400M costs billions

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The cost to the South Africa taxpayer of the Airbus A400M Loadmaster programme has escalated to R47 billion – or equivalent to the entire 1999 Strategic Defence Package.
Armscor CE Sipho Thomo yesterday morning told the National Assembly’s Portfolio Committee on Defence and Military Veterans the cost had escalated from a previous estimate of R17 billion.
SA ordered eight of the aircraft and joined the A400M programme as a workshare partner in April 2005. At the time, the SA Air Force stated the cost as €837 million, then R7,438,200,001.88. No further costs have ever been publicly stated.
It is not clear when the cost more than doubled from R7.4 billion – and why.
In February then-Defence minister Charles Nqakula said Treasury had up to then paid R2 889 430 637 to Airbus for the airlifters. Should SA remain in the programme, another R1.1 billion is due by month’s end.
A number of European countries, SA and Malaysia have ordered 192 of the aircraft in what is described, at €120 billion, as Europe’s most expensive military programme to date.
Problems with the engine design, engine software and wing structure has caused a four year slippage in delivery, with the first SAAF aircraft now only expected in 2014.
EADS and Airbus are still renegotiating the purchase contracts and delivery schedule with SA and European governments, several of whom have threatened to cut orders and impose penalties.
SAAF chief Lt Gen Carlo Gagiano earlier this year said SA would be guided by the outcomes of the European talks.
An Airbus spokesman and Department of Defence head of communication Siphiwe Dlamini last night confirmed the company and the SA government were currently in talks. Both declined to comment on the content of the talks.
The official opposition Democratic Alliance (DA) party said after the Portfolio Committee meeting that the programme, Project Continent, should be terminated “due to estimated cost overrun of R30 billion.”
“This means that unless the programme is terminated, the ordinary taxpayer will be forking our nearly R6 billion per aircraft,” the party’s shadow defence minister, David Maynier said.
He adds that the R47 billion is “nearly three times the total budget for the air force in the 2009/2010 financial year. We have to get out while we can.”
A look at the wikipedia indicates that the rival Boeing C17 Globemaster III in 2007 cost $218 million each.
At the current exchange rate of $1/R7.2 SA would be able to buy 31 C17s for R47 billion.
Armscor CE Sipho Thomo yesterday morning told the National Assembly’s Portfolio Committee on Defence and Military Veterans the cost had escalated from a previous estimate of R17 billion.
SA ordered eight of the aircraft and joined the A400M programme as a workshare partner in April 2005. At the time, the SA Air Force stated the cost as €837 million, then R7,438,200,001.88. No further costs have ever been publicly stated.
It is not clear when the cost more than doubled from R7.4 billion – and why.
In February then-Defence minister Charles Nqakula said Treasury had up to then paid R2 889 430 637 to Airbus for the airlifters. Should SA remain in the programme, another R1.1 billion is due by month’s end.
A number of European countries, SA and Malaysia have ordered 192 of the aircraft in what is described, at €120 billion, as Europe’s most expensive military programme to date.
Problems with the engine design, engine software and wing structure has caused a four year slippage in delivery, with the first SAAF aircraft now only expected in 2014.
EADS and Airbus are still renegotiating the purchase contracts and delivery schedule with SA and European governments, several of whom have threatened to cut orders and impose penalties.
SAAF chief Lt Gen Carlo Gagiano earlier this year said SA would be guided by the outcomes of the European talks.
An Airbus spokesman and Department of Defence head of communication Siphiwe Dlamini last night confirmed the company and the SA government were currently in talks. Both declined to comment on the content of the talks.
The official opposition Democratic Alliance (DA) party said after the Portfolio Committee meeting that the programme, Project Continent, should be terminated “due to estimated cost overrun of R30 billion.”
“This means that unless the programme is terminated, the ordinary taxpayer will be forking our nearly R6 billion per aircraft,” the party’s shadow defence minister, David Maynier said.
He adds that the R47 billion is “nearly three times the total budget for the air force in the 2009/2010 financial year. We have to get out while we can.”
A look at the wikipedia indicates that the rival Boeing C17 Globemaster III in 2007 cost $218 million each.
At the current exchange rate of $1/R7.2 SA would be able to buy 31 C17s for R47 billion.



Pic: A400m plane