§ Mr. CousinsTo ask the Secretary of State for Defence what expenditure, in which financial years, was committed by the recent signing of the Memorandum of Understanding on the European Fighter Aircraft project; what proportion of the total estimated expenditure on EFA this represents; whether such expenditures will be subject to exchange rate variations, and what is the present estimated unit cost of each of the 232 EFAs. [22983]
§ Mr. SpellarSignature of the Memoranda of Understanding (MOU) on 22 December 1997 committed the UK and its collaborative partners to the Production Investment (PI), Production and Support phases of the Eurofighter programme. We estimate the cost to the UK of PUProduction and initial support will be approximately £11.5 billion (at 1997 prices) which is some 72 per cent. of the total procurement cost. Contractual negotiations are currently being finalised with the aim of signing the relevant contracts in the coming weeks. Expenditure will occur during the period 1998 to 2014 when the last aircraft is scheduled to be delivered to the Royal Air Force. Aircraft will be ordered in three tranches and, with a few exceptions, the underlying funding principle is that each nation will pay for the work carried out in its own country. The extent of expenditure which will be subject 473W to exchange rate variation, therefore, will be relatively small. The Unit Production Cost of each aircraft is some £40.2 million at 1997 prices.