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| Britain |
| UK Carriers face new delay over rising cost |
| 2006-11-02 |
| Final clearance to build the Royal Navy's new aircraft carriers risks slipping further behind schedule amid continuing disagreements between industry and the Ministry of Defence over rising costs. The two sides meet tomorrow to try again to resolve their financial differences after the consortium building the carriers said the price would be around £300m above MoD expectations. After years of negotiations the Aircraft Carrier Alliance, which includes BAE Systems, VT Group, Thales and MoD officials, should have submitted final price details for the long-delayed project last Thursday. Recent guidance from the MoD has been that the cost of the two vessels would be about £3.5bn, which itself is up from an initial estimate of between £2.8bn-£3bn. However, the consortium says the carriers cannot be built for less than £3.8bn, but has agreed to work on a incentive scheme that the MoD hopes could reduce the cost to £3.6bn. The consortium partners would share any cost saving. That's $7.2 billion USD One person linked to the alliance expressed exasperation yesterday on learning that last week's deadline for a final price had been missed. "I just can't believe that. I really thought everything had been sorted out," he said. Clearly a youth with little experience in defence contracting. Another source suggested that the last-minute hitch was due to concerns that the Treasury will not agree to £3.8bn. "I think that after all this time the Defence department would settle for £3.8bn - but they are not the ones paying for it." Once the price is approved, the companies can start preparing to construct the carriers and employ staff. The MoD's latest timetable for that to start was December, with the two carriers expected to enter service in 2012 and 2015. An MoD official said yesterday: "We are making progress on negotiations and we are optimistic that we can finalise negotiations at a price we can afford and industry can deliver." Construction of the carriers was hailed as a new way of working for the MoD and industry, and an attempt to avoid the large cost overruns that have dogged other major defence projects. Nothing new there. They promise that every time Lord Drayson, the defence procurement minister, has demanded that industry share more of the risk should the carriers hit problems or run over budget. The defence industry now has to work to fixed prices and pay penalties fees when things go wrong. The carriers, each weighing 65,000 tons and 280 metres long, will be three times the size of the existing Invincible-class vessels. Sounds and looks a lot like a Forrestal class carrier. (Even has an E-2 on deck in the romantic artists rendering.) Considering that the current cost of a CVN 21 carrier is $8.1 billion USD, wouldn't it make a lot more sense for the Brits to order two of those instead of getting into bed with the frogs and their CDG trackrecord? Precedent was set with the SSBNs and I can't imagine we'd object to a deal that allows them to share some of the fixed costs. Learn a lesson from Airbus, mates. Get a real carrier for a small bit more. And maybe less by the time they're done. |
| Posted by:Nimble Spemble |
| #12 Heck if we started a formal replacement building program now, we could have all of the LHAs replaced in about 7 years, with SLEP run on the first two in the next 4 years. That would let us equip the British Navy with 2 Harrier carriers in 4-6 years, the Indian Navy with 2 of the same in 6-9 years, with one left over for Taiwan. And with the SLEP running about $1 billion per ship, we could sell the LHAs to them for $2 billion each, recoup all our major costs and keep our shipbuilders going for another decade. |
| Posted by: Shieldwolf 2006-11-02 18:41 |
| #11 Since they are looking to run Harriers anyway, why not sell them the LHAs or LHDs? The LHAs are scheduled for retirement beginning in 5 years, build 2 more LHDs and retire them early. Then sell them to the Brits, who would then have a Harrier carrier with the built-in amphibious assault capabilities. |
| Posted by: Shieldwolf 2006-11-02 18:06 |
| #10 The fixed costs on the CVN 21 are estimated to be $5 billion for the class. So the first model will be $13 billion. Follow ons will be $8 billion per ship. While each one is customized from going down the learning curve, there are economies. Newport News would love to get as many orders for the class as possible. We sold the Brits the Trident D-5 and SSBN to go with them. I think that's as close to the family jewels as a CVN, especially as they are already buying the F-35 and getting some sort of source code. |
| Posted by: Nimble Spemble 2006-11-02 17:40 |
| #9 NS, you gotta also remember lead time in production costs and effectively mass manufacturing. These aircraft carriers (CVFs) are also essentially one off production units hence a higher per unit cost potentially. Also might want to remember none of the US nuke powered aircraft carriers have ever been sold to anyone. I'd suspect we'd rather make a new reef than even give up to Nimitz to the Brits and Aussies. |
| Posted by: Valentine 2006-11-02 17:34 |
| #8 remoteman: The Russians basically gave up at anything larger than 2/3rds Nimitz class. Even then they only have one that will float in that size, the other was always too unseaworthy. Back in the day, they had one that capsized in a still harbor on a clear day, never even making its maiden voyage out of port. One effort led to a successful small carrier, with planes stored on deck. Unfortunately, the deck was too small for landings, with less than 50% success rates. So they cantilevered a extra section of deck, which did the trick. But then, some bureaucrat said "Extra deck space! Let's add another plane!" Back to less than 50% successful landings. Aircraft carriers are as much art as science. Any day now I expect the Chinese to have an awful disaster, because they, like the Russians, just figure they can slap one together. |
| Posted by: Anonymoose 2006-11-02 15:21 |
| #7 Consider that Hokkaido, Honshu, Shikoku, and Kyushu are impossible to sink by any known technology. |
| Posted by: Slaviger Angomong7708 2006-11-02 15:14 |
| #6 I doubt the Japanese will have any difficulty building one when they want to. Yamato was pretty tough to sink. |
| Posted by: Nimble Spemble 2006-11-02 14:51 |
| #5 Wow Anonymoose, I never have heard that, but when you look at the ship it makes sense. But given current design technologies I don't understand how center of gravity issues could not be overcome. |
| Posted by: remoteman 2006-11-02 14:44 |
| #4 What always stopped the Russians cold was that only the US has ever mastered the ability to stabilize one of those big suckers. That is, beyond a certain size, it's like balancing an elephant doing a handstand with one foot on a bowling ball. Right now, China is discovering the same nightmare, and I wouldn't be surprised if they build a big carrier that doesn't make it out of the harbor before it visits the bottom. |
| Posted by: Anonymoose 2006-11-02 13:06 |
| #3 The basic problem with jump jet carriers is that the planes take off with little fuel and weapons. While adequate for a defensive carrier protecting Atlantic convoys, it will be in serious danger attacking land targets. Those carriers will have no E2C, but short ranged AEW helicopters and will be within range of land based aircraft long before the the carrier's jump jets can attack the land bases. A very scary proposition that gives the British little capability to operate by themselves. They should have gone with CTOL carriers and the F-35C and limited the jump jets to the small carriers. |
| Posted by: ed 2006-11-02 10:54 |
| #2 Color my face red. But the point still holds, even if they only get Nimitz carriers. Though Norm Schactman estimates the outyear cost of a Nimitz to be higher than a CVN 21. The $5billion is in historic dollars for the GHW Bush. |
| Posted by: Nimble Spemble 2006-11-02 10:35 |
| #1 That's £3.8bn for 2 carriers. That carrier pictured lost out. The Brits are going to build jump jet carriers. A Nimitz carrier cost $5bn and carries more aircraft than the 2 Brit carriers combined, carries the E2C, nuke powered so has much more room for avgas and stores, has catapults for full fuel/full warload flights. |
| Posted by: ed 2006-11-02 10:12 |
