§ Lord Hardy of Wath
asked Her Majesty's Government:
Whether the Ministry of Defence has changed its procurement plans for the Nimrod MR4. [HL3017]
§ Lord Grocott
The Nimrod MRA4 will replace the Nimrod MR2 as the RAF's new maritime patrol aircraft.
Recent work on future maritime reconnaissance capabilities has shown that the operational tasks of the Nimrod MRA4 aircraft can be carried out with a smaller fleet than originally envisaged. This will allow us to reduce the number of aircraft on order from 21 to 18. This revised approach will allow the RAF to meet all the tasks for which the aircraft is being procured while delivering better value for money.
This judgment reflects a number of factors. The submarine threat, while still prevalent world-wide, has not developed as expected when the production contract was signed in 1996. Moreover, the Nimrod MRA4 will also offer a markedly greater capability compared to the MR2 it succeeds through improved aircraft and sensor performance. Finally, discussions with BAE Systems, the prime contractor, have identified potential in-service support options to maximise aircraft availability for operational tasking.
The Defence Procurement Agency is working with BAE Systems on an incremental approach to delivery for Nimrod MRA4. This includes the acceptance of aircraft in two steps. An initial capability will be provided by the time of first contracted aircraft delivery in August 2004, with the full specification being met by the time of the seventh aircraft delivery and entry into service, which is contracted for March 2005. The reduced order will affect only the last three aircraft of the previously planned production run.
In accordance with the partnership principle of Smart acquisition, agreement has been reached with BAE Systems to maximise the financial benefits to the Ministry of Defence of this reduced order while incentivising the company appropriately. The reduction in procurement costs will be agreed in detail with the company. On the basis of current assumptions, the smaller fleet is expected to reduce support costs alone by some £360 million.