(2) what financial penalties for (a) full cancellation and (b) reduction in numbers ordered would fall to be paid by his Department to the prime contractor under the contract for (i) A400M, (ii) Future Strategic Tanker Aircraft, (iii) 3rd Tranche Eurofighter, (iv) Joint Strike Fighter, (v) Defence Training Review, (vi) CVF, (vii) Apache block 3 upgrade and (viii) Tornado Capability Upgrade Strategy (Pilot) project; and at what procurement stage they would fall to be paid in each case for each project.
Information regarding the current stage of negotiations for each of the projects listed is as follows:
A contract for the development and production of the A400M aircraft was signed with Airbus Military on 27 May 2003 by the Organisation for Joint Armaments Co-operation (OCCAR) on behalf of participating nations (Germany, France, Spain, Belgium, Luxembourg, Turkey and the UK). Airbus has recently proposed a new approach for the A400M programme. OCCAR and the Partner Nations are not in negotiation with Airbus in relation to the contract.
(b) Future Strategic Tanker Aircraft (TSTA)
Contract negotiations with AirTanker Ltd. were successfully concluded on 6 June 2007, Official Report, column 21WS, and the contract was formally signed in March 2008, Official Report, column 31WS.
(c) Tranche 3 Eurofighter
Negotiations with partner nations and industry are continuing.
(d) Joint Strike Fighter
Negotiations for production contracts for JSF are conducted annually. UK participation in the forthcoming negotiations remains subject to formal departmental approval.
(e) Defence Training Review
Package 1, which aims to deliver technical training, is currently near the end of the Assessment Phase. A Final Clarification and Confirm (‘FC&C’) exercise is now ongoing. The Metrix Consortium’s revised proposals have been received and are being evaluated.
Package 2, to deliver specialist training for Logistics and Personnel Administration and Policing and Guarding (both Military and MOD Police), has just started a two year Assessment Phase.
(f) Future Aircraft Carrier
The manufacture contract was signed on 3 July 2008 but further negotiations to agree a way forward are now underway with the Aircraft Carrier Alliance following the recent announcement of the intention to delay the in-service dates of HMS Queen Elizabeth and HMS Prince of Wales by between one and two years.
(g) Apache Block III
We have had early discussions with the US Army about their Block III upgrade programme but, to date, have not made any decisions about whether to adopt elements of the Block III programme as part of our own plans to sustain UK Apache capability through-life.
(h) Tornado Capability Upgrade Strategy (Pilot)
The contract for the Design, Development and Integration stage was awarded on 21 December 2007.
I am withholding information relating to the detail of any financial remedies that may be incurred as its disclosure could prejudice the commercial interests of the contractors and the Department.
The Future Strategic Tanker Aircraft (FSTA) service is planned to begin in 2011 with the full service being available by 2016. The MOD will not pay instalments but will pay for the service as it is used.
Expenditure on the A400M programme is allocated separately to development and production activities. Development is funded in instalments by all partner nations against an agreed profile that started in 2003 and is on-going. Production is funded as a series of six payments against each individual aircraft, with the final payment occurring on actual delivery.
(2) what steps are being taken further to extend the lives of the C-130K aircraft;
(3) what assessment he has made of the cost-effectiveness of further extending the lives of the C-130K aircraft; and if he will make a statement;
(4) what the current out-of-service date is for the C-130K aircraft.
I refer the hon. Member to my answer on 24 November 2008, Official Report column 903W. No steps have been taken to extend the out of service date of the C130K fleet as work to assess the cost-effectiveness of options to mitigate any potential capability gaps that might arise as a result of delays to the A400M programme is ongoing.
We expect to retire one C130K aircraft before the end of the current financial year.
Following the announcement of delays by Airbus Military on the A400M programme, we are considering a number of options as a contingency to mitigate any potential capability gaps that may arise. These include an extension to the life of the C-130K fleet and leasing or procurement of additional C-17 and C-130J capacity.