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Tue, Jul 10, 2007

Australian DoD Rebuts Report On 'True Cost' Of Joint Strike Fighters

Paper Claims Government Deliberately Cites Lowest Figure

An investigation by an Australian newspaper into what it calls "the true cost" of the country's agreement to purchase up to 100 F-35 Joint Strike Fighters has caused some controversy, and prompted a terse response from Australia's Department of Defense.

The Age reports a recent assessment by officials with the RAAF and Defense Department concluded the total cost of an F-35 that meets the minimum requirements to enter active service will be at least $131 million per plane. That doesn't jibe with figures Australia's government and the RAAF have told the public, the paper says, which have run between $67 million and $80 million (all costs are in Australian dollars -- Ed.)

The difference lies in between "recurring fly away cost" -- the amount of money needed to simply send the plane out the factory door, the Age says -- and "average procurement cost," which factors in the total needed to build the plane, equip it, and fly it. The latter also includes the cost of training, support, and spare parts.

Andrew Davies, program director of the Australian Strategic Policy Institute, says the government isn't technically wrong in quoting fly away cost, but it is somewhat misleading regarding how much Australia will pay to send each plane into the air.

"The lowest figure is the recurring fly away cost, which is the cost incurred every time a new airframe is rolled out the hangar door," Davies said.

When asked to explain the difference in figures, a spokesman for the Defense Department declined to comment on procurement costs, due to "different non-procurement profiles between the US and Australia."

On Monday the Department of Defense issued a release, responding to The Age report.

"Some media reporting today fails to show a proper understanding of costs associated with the JSF," the DoD said. "... Defense has always been careful to point out that the total project cost for the New Air Combat Capability project will be higher than the sum of flyaway costs for individual JSF aircraft.

"The estimated average flyaway cost for Australia's JSF aircraft is currently estimated to be about $A80 million. Total project costs, however, will also include the acquisition of facilities, spares, initial training, support systems and weapons," the release noted. "Typically the cost of these broader project elements adds about 50 percent over the cost of the acquisition of aircraft, providing an approximate per aircraft total cost of around $A120 million.

"For a fleet of 100 aircraft this would mean a total project cost of around $A12 billion which is well within the project cost published in the 2007 Defence Capability Plan of $A11.5 to $A15.5 billion."

Australia has allocated up to $16 billion to purchase up to 100 F-35s, to replace the country's fleet of early-model F/A-18 Hornets and F-111s.



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