Thursday, March 10, 2011

DTN News - DEFENSE NEWS: Canada F-35 Jets Cost To Soar To $29Billion: Watchdog....NSI News Source Info # 1702

DTN News - DEFENSE NEWS: Canada F-35 Jets Cost To Soar To $29Billion: Watchdog....NSI News Source Info # 1702
(NSI News Source Info) TORONTO, Canada - March 10, 2011:

The total cost of the Conservative government's plan to purchase 65 F-35 fighter jets over 30 years is close to $29.3 billion — billions more than previously estimated, according to Parliament's budget watchdog.

The pricetag includes both the purchase price and long-term sustainment costs for the jets. "Total ownership" of the program had previously been estimated at $16 to $18 billion.

Parliamentary budget officer Kevin Page, who has cast doubt before on the government's accounting practices, was asked by the Liberal Opposition to look at the F-35 deal with U.S. defence giant Lockheed Martin.

Previous reports by Page have questioned the government's deficit projections and its plan to cut the size and cost of the federal bureaucracy.

Thursday's report again puts him at odds with the Conservatives and gives weight to opposition party arguments that the purchase of the jets would cost more than the government has been saying.

To arrive at his estimate of $29.3 billion, Page said he used a "top-down" model that considered historical trends on the cost of aircraft and key cost drivers. Page estimates the acquisition cost for the fleet at $9.7 billion and the ongoing sustainment cost for it at $19.6 billion. The sustainment cost breaks down as follows:

  • initial logistics set-up cost: $1.7 billion;
  • operating and support cost: $14 billion;
  • overhaul and upgrade cost: $3.9 billion.

Page cautions that any cost estimates, his own or those from other sources, should be viewed in the context of the methodology used and data available. He said he asked the department of national defence for clarification on the methodology it has used to arrive at its estimates.

http://defense-technologynews.blogspot.com/2011/03/dtn-news-defense-news-canada-f-35-jets.html

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