KUALA LUMPUR: The story below from Defense News is self-explanatory. However it did not mentioned whether export customers like Malaysia and South Africa, would be involved, though it is likely that the French will consult with our government. Malaysian Defence sentiment on the matter is clear, cancel the deal but many have since said it will be very difficult due to the commercial arrangement with CTRM.
Of course, CTRM will be put on the spot, but again the Armed Forces needs which is more important clearly outranked what ever needs of the industry. Whether we want to cancel the procurement or not, it will be in the best interest for us to be involved in the negotiation process so we will get the best deal.
Anyways, since EADS/Airbus has other military products like the Eurocopter Cougar or the CN-235/295 series, I am sure we can have the cake and eat it too. However it will all depend on us getting on the ball, pronto.
Malaysian Defence believes this is a top priority for the new defence minister apart from the other important things of course.
A400M Customers To Have 3 Months To Renegotiate Contract
Paris – An announced standstill agreement on the A400M is expected to be signed next week, giving the European launch customers three months to renegotiate the contract with EADS for the military transport aircraft, French Defense Minister Hervé Morin said April 8.
Morin told the European American Press Club that his British counterpart had posed questions on the matter but that he persuaded him on the sidelines of the NATO summit last week. “He gave his agreement,” Morin said.
“We can sign the standstill agreement in the next few days,” he said. That would give the seven launch customers and EADS three months to renegotiate the terms of the 20 billion euro ($26.6 billion) development-and-production contract for the A400M.
The complexity of the aircraft, particularly the engines, and the demanding military specifications needed for an aircraft that requires civil certification mean the A400M would be four or five years late, Morin said.
That lateness means some countries would need to take “palliative measures” to fill the capacity gap, which meant probably buying aircraft – likely American – off the shelf, Morin said. The stopgap buys mean less money to acquire the full number of A400M planes, and the problem now is how to reduce the number of “target” buys, he said.
The standstill keeps the contract in place but gives time to reset the terms in light of British and French operational needs for interim airlift, and also allows EADS to renegotiate a deal that eases the burden of delivering full initial operating capacity on the A400M.
EADS so far has booked some 2.2 billion euros of charges and faces a repayment of 5.7 billion euros of advance predelivery payments if the program is canceled.
The customer governments opted for a commercial contract for the A400M because they thought Airbus, as a leading civil airliner maker, would bring the plane in on time and budget, avoiding the red tape of a classic military procurement.
Airbus also submitted to political pressure to pick a new European turboprop engine rather than opt for a rival motor from Pratt & Whitney Canada.
Separately, Morin confirmed that he expected a signing in the next few days of an order for a third projection-and-command ship, bringing work to STX France and DCNS.
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