Friday, 17 February 2017

Austria to sue Airbus over suspected Eurofighter fraud

The Austrian government is going to sue Airbus and Eurofighter. An investigation had proved that these companies had misled Austria "with fraudulent intent" regaring the purchase price, the deliverability and the equipment of the fighters.

This is not surprising as the acquisition of the type has been an ongoing scandal. When the competition to replace the Saab Draken was launched the Gripen was the favourite. Austria had operated Swedish fighters for decades and it was a low cost aircraft that fitted very well the requirements. Other politicans preferred the F-16 or MiG-29, which were cheaper. Russia offered MiG-29SMT in exchange for the Russian debt with Austria.

The F-16, Gripen and EF-2000 were selected as finalists. Initially it was expcted to buy 30 aircraft (24 single seats and 6 two-seaters), but the requirement was reduced to 24 due to cost. In 2002 the EF-2000 won and was selected. It was nothing surprising as it was the most powerful model. However, questions arose due to the cost and real need of it. Austria is a neutral country wiht a small airspace. The decission was justified beacuse the Gripen offer was only 3-4% cheaper, and the f-16 did not have some of the equipment required.

The first contract was supposed to be for 24 fighters at a cost of 1790 million euros. Later on it became clear that the figure was too low, and the real price would be 2085 millions. The floodings Austria suffered in 2002 affected the contract. It was reduced to 18 aircraft for 1959 millions. Final decision would be taken after the 2003 election.

Austrian EF-2000.

The bribes were the other big issue. Lobbies were not allowed to make presents/donate to officials involved in the selection process, but payments were made. The government had to organise an investigation. The wife of the Air Force commander, Generalmajor Erich Wolf, received a loan worth 87000 euro which was never paid back. Companies owned by FPO politician Gernot Rumpold received 6.6 millioon euros worth of contracts. Erich Deutsch, minister of defence, went on holidays a few times with all expenses covered.  

At some point there was talk of cancelling the contract, but this would hav costed 1.500 million euros. Finally the minister of defence Norbert Darabos signed the contract without waiting for the results of the probe. At the end just 15 aircraft were acquired for 1589 million euros.

- 9 new aircraft belonging to Block 5.
- 6 belonging to Luftwaffe, belonging to Block 2/2b.

The second hand samples were modernised to Block 5 standard. To reduce the cost some equipment was not acquired (Pirate and MAW). The aircraft are not able to use AMRAAM missile; missions are carried out with gun and IRIS-T.

The signing of the contract did not stop the criticism. According to some critics, the savings had been obtained by reducing the equipment and number of hours to be flown. Also, the contract's offsets (200%) were difficult to quantify.

In my opinion another problem in the deal is that the aircraft belong to Tranche 1. Originally they were supposed to be the more modern Tranche 2. The operators of Tranche 1 are not going to upgrade this variant as it is too expensive. 

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