To ask the Secretary of State for Defence whether under the proposed Future Strategic Tanker Aircraft PFI (a) the contractor and (b) his Department will be responsible for war damage. [123551]

Under the terms of a PFI contract, liability for damage, including war damage, to the Future Strategic Tanker Aircraft assets would be covered either through commercial insurance arranged by the contractor or by means of an indemnity provided to the contractor by the Ministry of Defence, depending on the circumstances involved. The detailed arrangements will be subject to final negotiation with industry.