The RAF‘s most expensive aircraft had just made its first flight:
The Nimrod MRA4 programme was initiated back in 1996 by TV presenter, one-time director of BAE Systems and former New Statesman theatre critic Michael Portillo, who was defence minister at the time. Under the original deal, BAE Systems would be paid a “fixed price” of £2.2bn to rebuild, rearm and upgrade the RAF’s fleet of 21 Nimrod MR2s, the last De Havilland Comet airframes left flying in the world, to the point where they would effectively be new aircraft. This would have meant a cost of just over £100m per plane. The project was then known as “Nimrod 2000”, rather optimistically as it turned out.
As time went by it became clear that the price was not fixed, and that “2000” wasn’t a good name for the project at all: it was re-dubbed Nimrod MRA4. BAE Systems has just announced that the first flight of a production-standard MRA4 took place last week, though the aircraft is not yet ready for handing over to the RAF — that will probably take place next year. Then there will be more delay before the type can be declared operationally capable.
Meanwhile the MoD now estimates the programme’s overall price tag as £3.6bn, an increase of more than two-thirds. In fact the situation is much worse than this, as the number of planes has had to be slashed to prevent even worse cost overruns. The RAF will now receive just 9 aircraft rather than 21.
As a result the cost per plane has actually quadrupled: each MRA4 will now have cost the taxpayers a cool £400m, better than $660m at current rates.
On a pure economic level, this is quite a price increase, but it’s typical of military equipment contracts: the very small number of items means that there are no economies of scale to be reaped, and all the design, test, and administration costs must be recouped over a much shorter production run. It still looks very bad . . . unless you happen to be in opposition right now, in which case it’s a great campaign talking point.
