FSTA-When?
FSTA delays mean the RAF will keep its BAC VC10s how long!!!
Interesting blog on Flight International, particularly about dutch roll and an errant galley trolley 
But the VC10, almost incredibly, is looking highly likely to hit 50 years of service.
But the VC10, almost incredibly, is looking highly likely to hit 50 years of service.
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... if ever?
The Telegraph - Fri 26 Jan 07
Looks like DPA is playing politics with the RAF's capability. 
Drayson's stand is vital in defence of high-tech industry
The customer is always right. A maxim that never seems to apply to the defence industry. Despite the Ministry of Defence spending billions a year on arms, it has always been the contractors that dictated the terms.
But things are certainly different under Lord Drayson, the defence procurement minister. His dispute with EADS, which has threatened to pull a £100m investment in its Airbus UK operation, is sending signals far beyond the offices of this Franco-German aerospace giant.
The bottom line is: withdraw investment in new wing technology at Airbus UK and EADS can kiss goodbye to some MoD defence contracts.
.
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But if Drayson follows through with his threat, the first casualty for EADS could be the award of a £13bn contract to supply mid-air refuelling aircraft for the Royal Air Force.
The customer is always right. A maxim that never seems to apply to the defence industry. Despite the Ministry of Defence spending billions a year on arms, it has always been the contractors that dictated the terms.
But things are certainly different under Lord Drayson, the defence procurement minister. His dispute with EADS, which has threatened to pull a £100m investment in its Airbus UK operation, is sending signals far beyond the offices of this Franco-German aerospace giant.
The bottom line is: withdraw investment in new wing technology at Airbus UK and EADS can kiss goodbye to some MoD defence contracts.
.
.
But if Drayson follows through with his threat, the first casualty for EADS could be the award of a £13bn contract to supply mid-air refuelling aircraft for the Royal Air Force.
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£400M?
KC-10s are only £45.3M each at the current FFR!
That figure must be too much - You could buy at least 4 decent new jets for that - not life extend an old fleet by 5 years. Nah - can't be right - can it?
KC-10s are only £45.3M each at the current FFR!
That figure must be too much - You could buy at least 4 decent new jets for that - not life extend an old fleet by 5 years. Nah - can't be right - can it?
Half a billion ponds to keep the ageing VC10 fleet staggering on until 2015???
YGBSM, as they say.
Whispers reaching me of air and ground engineers taking early retirement in increasing numbers, aircraft being launched with BOTH autopilots u/s (which makes smoke drill in an aircraft with ageing wiring impossible....)
Just hope that someone with sufficient testiculation thumps the table about 'new' tankers pretty urgently before one of these museum pieces falls to pieces.
And the FSTA civil serpent once said "This program will NOT slip"......
YGBSM, as they say.
Whispers reaching me of air and ground engineers taking early retirement in increasing numbers, aircraft being launched with BOTH autopilots u/s (which makes smoke drill in an aircraft with ageing wiring impossible....)
Just hope that someone with sufficient testiculation thumps the table about 'new' tankers pretty urgently before one of these museum pieces falls to pieces.
And the FSTA civil serpent once said "This program will NOT slip"......
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D-IFF; the VC10 extension cost is in the DPA's Category B rating, so vaguely listed as somewhere between £100 million and £400 million. However, the two earlier Javelin project phases total £245 million, so it's probably going to be at the lower end of that scale.
Still not cheap, I grant you!
Still not cheap, I grant you!
But don't you see - that £400 million is special, non-costy money, quite unlike the £40 million a throw for a new jet, which is ordinary money that costs. Only money that's paid up front is real money if you work for the Treasury.
Quite astonishing, I know, but 400 years on, HM Treas still hasn't quite grokked the distinction between assets and cashflow..
Quite astonishing, I know, but 400 years on, HM Treas still hasn't quite grokked the distinction between assets and cashflow..
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Chicken –
Treasury avowedly DOES know the difference between asset capitalisation and cashflow, which is why they brought in Resource Accounting and Budgeting (RAB) a few years ago. RAB introduced commercial-style accounting, including a pile of “non-cash” to pay for depreciation. This was a one-off that applied to all departments and had bi-partisan support.
A mate tells me that the MoD is (largely) responsible for their own downfall, because they couldn’t get the numbers right in 2001, and when Treasury said “are you sure?” MoD told them to wind their necks in… sad thing was that Treasury was right, and the MoD has been playing catch up with their budget ever since.
Add the cost of 2 wars, procurement cost fiascos and general MoD management incompetence, and all of the birds are returning to the roost at once.
Always quite liked travelling by Swish though…
S41
Treasury avowedly DOES know the difference between asset capitalisation and cashflow, which is why they brought in Resource Accounting and Budgeting (RAB) a few years ago. RAB introduced commercial-style accounting, including a pile of “non-cash” to pay for depreciation. This was a one-off that applied to all departments and had bi-partisan support.
A mate tells me that the MoD is (largely) responsible for their own downfall, because they couldn’t get the numbers right in 2001, and when Treasury said “are you sure?” MoD told them to wind their necks in… sad thing was that Treasury was right, and the MoD has been playing catch up with their budget ever since.
Add the cost of 2 wars, procurement cost fiascos and general MoD management incompetence, and all of the birds are returning to the roost at once.
Always quite liked travelling by Swish though…
S41
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I know I'm only a pilot & accountancy is a bit of a mystery to me, but if a KC 10 costs £45.3 million, how come FSTA is £13 billion for 14 aircraft? I know that's a PFI for the running of the aircraft too, but procurement of 14 aircraft is approx £634 million, which leaves just over £12 billion for the contract - that's alot of fuel & spares!
Have they factored in an exponential rise in the price of fuel over the life of the contract? Does FSTA really present value for money for the RAF or the taxpayer?
Or does my misunderstanding of accounting practice go even deeper?
Enlightenment in simple non-jargon terms please!
Have they factored in an exponential rise in the price of fuel over the life of the contract? Does FSTA really present value for money for the RAF or the taxpayer?
Or does my misunderstanding of accounting practice go even deeper?
Enlightenment in simple non-jargon terms please!
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Ok, open invitation to any MP, MOD civil servant, senior RAF officer, CAS himself perhaps:
How can 14 aircraft cost £13 billion?
Why can we not but some Boeings/ Airbuses etc ourselves, & run them ourselves, just for our own use without some useage off set with an airline?
Answers please, or I'll have to just believe that it's some accounting nonsense where you avoid capital expenditure in the short term but pay through the nose in the long term....prove me wrong!
How can 14 aircraft cost £13 billion?
Why can we not but some Boeings/ Airbuses etc ourselves, & run them ourselves, just for our own use without some useage off set with an airline?
Answers please, or I'll have to just believe that it's some accounting nonsense where you avoid capital expenditure in the short term but pay through the nose in the long term....prove me wrong!
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Ken,
I think you've got the wrong end of the stick. The MOD will not be buying any FSTA at all! You can find a pretty good explanation here:
Airtanker Website
The deal is a PFI. As such, the aircraft will belong to Airtanker who will provide a service to the RAF over 27 years. Here's the bottom line:
That means that the service will cost about £500m a year for 27 years. This will include all aircraft support and servicing, aircrew training and even the provision of some crews.
I don't know whether that's a good deal or not, but once you look at it from that point of view, it doesn't look too bad. Welcome to the brave new world of defence contracts!
Mind you, at least the treasury won't be able to continually keep reducing funding for AAR once this contract is signed. Once it's on paper, the MOD will have to ringfence that money for 27 years!
.... but I wonder what will happen if we stop needing AAR in 15 years time.
Hope that helps.
I think you've got the wrong end of the stick. The MOD will not be buying any FSTA at all! You can find a pretty good explanation here:
Airtanker Website
The deal is a PFI. As such, the aircraft will belong to Airtanker who will provide a service to the RAF over 27 years. Here's the bottom line:
The MoD estimates its through life programme expenditure at £13 billion.
I don't know whether that's a good deal or not, but once you look at it from that point of view, it doesn't look too bad. Welcome to the brave new world of defence contracts!
Mind you, at least the treasury won't be able to continually keep reducing funding for AAR once this contract is signed. Once it's on paper, the MOD will have to ringfence that money for 27 years!
.... but I wonder what will happen if we stop needing AAR in 15 years time.
Hope that helps.
Gents
I see we are still quoting a 27 year contract. IIRC the 27 years was supposed to comprise:
3 years assessment and negotiation
4 years transition from in service date (ISD) to full service date (FSD) and then
20 years of full service delivery.
Now given that we are almost exactly 3 years after the announcement of preferred bidder and 2007 was the original ISD and we still don't have a contract, isn't it time to pull the plug and kill off this rediculous PFI?
I see we are still quoting a 27 year contract. IIRC the 27 years was supposed to comprise:
3 years assessment and negotiation
4 years transition from in service date (ISD) to full service date (FSD) and then
20 years of full service delivery.
Now given that we are almost exactly 3 years after the announcement of preferred bidder and 2007 was the original ISD and we still don't have a contract, isn't it time to pull the plug and kill off this rediculous PFI?
IIRC, Roly, we were told in 1996 that there was a need to replace VC10 and TriStar "within the next 10 years"......
With, as was stated at the time, around 25 aircraft of the A310/B767 category in multi-role tanker transport configuration.
And yet now the living museums the RAF operates are expected to stagger on until 2015? 19 years after we were told that they needed to be replaced before 2006??
With, as was stated at the time, around 25 aircraft of the A310/B767 category in multi-role tanker transport configuration.
And yet now the living museums the RAF operates are expected to stagger on until 2015? 19 years after we were told that they needed to be replaced before 2006??
Kill off the PFI?
And replace it with what? The whole reason for the PFI was because the MOD don't have the money to buy new aircraft up front.
As the new aircraft are needed right now, is there a valid alternative?
And replace it with what? The whole reason for the PFI was because the MOD don't have the money to buy new aircraft up front.
As the new aircraft are needed right now, is there a valid alternative?
With the VC10 now looking likely to stagger on for another six or eight years, perhaps the best idea would be to buy three second hand A310s per year for the next three years, and then three second hand A330s per year for three more years, converting them as they are received, and retiring the VC10s one by one as the Airbus tankers emerge after conversion.
Saintsman
We cannot extend the VC10 for ever and the Tristar is not very far behind. FSTA still shows no sign of delivery so we have to do something radical now!
JN
As already discussed the A310 is in short/non-existant supply and can therefore be discounted.
Therefore, and given that FSTA is likely to cost some £500M per annum, you kill off the PFI, take the funding line and then buy new A330 (or B767/B777, lets call them KC-X) tankers at the rate of 3 to 4 per year, starting next FY and do an incremental acquisition. As JN suggested, as new tankers are delivered you retire a VC10 or 2. We have funding lines for FSTA, we have funding lines for VC10 (just extended) and Tristar so the money is out there, just not enough to buy the 20 A330 sized ac that the RAF really needs in one go. So after 5 years (2012 and 2-3 years prior to VC10 OSD) you have a 15 strong fleet of new KC-X aircraft and the VC10 should be out of service (unfortunately just before its 50th
). A few years later we can start to withdraw the Tristars, unless we still need them to augment the still expanding fleet of KC-X, and let's face it the way we are going on war fighting we are still likely to need them!!
It's time to do the unthinkable and sacrifice the Sacred Cow of PFI on the altar of common sense.
We cannot extend the VC10 for ever and the Tristar is not very far behind. FSTA still shows no sign of delivery so we have to do something radical now!
JN
As already discussed the A310 is in short/non-existant supply and can therefore be discounted.
Therefore, and given that FSTA is likely to cost some £500M per annum, you kill off the PFI, take the funding line and then buy new A330 (or B767/B777, lets call them KC-X) tankers at the rate of 3 to 4 per year, starting next FY and do an incremental acquisition. As JN suggested, as new tankers are delivered you retire a VC10 or 2. We have funding lines for FSTA, we have funding lines for VC10 (just extended) and Tristar so the money is out there, just not enough to buy the 20 A330 sized ac that the RAF really needs in one go. So after 5 years (2012 and 2-3 years prior to VC10 OSD) you have a 15 strong fleet of new KC-X aircraft and the VC10 should be out of service (unfortunately just before its 50th
). A few years later we can start to withdraw the Tristars, unless we still need them to augment the still expanding fleet of KC-X, and let's face it the way we are going on war fighting we are still likely to need them!!It's time to do the unthinkable and sacrifice the Sacred Cow of PFI on the altar of common sense.
Yup - currently only 4 used A310s available worldwide. 3 x A310-324 with P&Ws for sale, 1 x A310-300 with CFs for immediate wet lease........
And yet in 1996 we were considering 24 or so brand new A310MRTTs......
Used aircraft are not really the answer - it's new build which are needed. But since the MoD has never bought a new tanker, always relying on someone else's cast-offs, the fast jet centric airships will still want their whizzy little pointy jets at the expense of all other capability.
And yet in 1996 we were considering 24 or so brand new A310MRTTs......
Used aircraft are not really the answer - it's new build which are needed. But since the MoD has never bought a new tanker, always relying on someone else's cast-offs, the fast jet centric airships will still want their whizzy little pointy jets at the expense of all other capability.