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MOD bungles cost taxpayer £6bn in 10 years
BY MACER HALL AND PETER ALMOND
Sunday Telegraph, 27.02.2000
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Last week is was the SA80 and Tornado GR-4. Then there is the Eurofighter and before that the Merlin helicopter, the Challenger 2 and Nimrod. Macer Hall and Peter Almond revel the embarrassing and costly equipment failures in the sorry history of Britain's defence produrement.

Army chiefs been quietly celebrating a moment of pride yesterday as Challenger 2 tanks rumbled around the battle-scarred Kosovan town of Podujevo in their first operational deployment.

The arrival of the £3 million, 64-ton armoured vehicles, which can deliver four rounds every 25 seconds from their l2Omm barrel and have the latest multi-targeting system, was a bold demonstration of British commitment to keeping the fragile peace in the Balkans.

However, the historic moment for the Royal Scots Dragoon Guards and the 7th Armoured Brigade made little impression beyond the potholed terrain where north-eastern Kosovo borders Serbia, Instead, two more embarrassments in a long saga of costly failure within the Ministry of Defence stole the headlines.

First, it emerged that Britain's vital military jet, the Tornado GR-4, was left unable to fire modern "smart" bombs after a £1 billion upgrade.

And, two days later, the MoD admitted that the British soldier's standard rifle, the SA8O, was finally being recalled for modification after years of complaints
about faults, including a habit of jamming when used in extreme weather conditions.

Unfortunately, both examples are all too typical. Now an investigation by The Sunday Telegraph can reveal that delays and overspending by the MoD have cost
the British taxpayer more than £6 billion in the past decade.
 

Analysis of the National Audit Office reports on the 25 largest equipment projects during the period, which cover defence expenditure of about £36 billion, shows that most of the new equipment for the Armed Forces will enter service at least three years late and cost at least seven per cent more than originally estimated.

If it had not been for the Trident nuclear submarine fleet costing £3.5 billion less than planned - because fewer ballistic missiles needed to be bought from America and were cheaper than expected - the situation would have been even worse.
 

Even Challenger 2 has been beset by problems. The tank is making its operational debut more than two years late and has cost £55 million more than expected. Some vehicles were delivered with an "unacceptable number of faults", according to
an Audit Office report and, at one stage, the MoD refused to accept further deliveries until reliability had been improved and faults with turrets corrected.

At present, the biggest financial headache for the military is the Eurofighter, a collaboration between Britain, Germany, Italy and Spain which is planned as the future of the RAF's attack capability. The £14.5 billion project is £1.5 billion over budget, accounting for more than half the total additional costs of the 25 largest projects.

Now due to enter service in 2002, the project to produce one of the most advanced military jets in the world is three years behind schedule.

The second biggest financial drain is the Merlin helicopter, running £815 million over budget and five years late. Much of this is due to a two-year delay after the crash of a pre-production model.

Upgrading the Tornado, which was this week revealed to have caused computer software faults,  is running £354 million over budget, a 60 per cent increase in costs.

Tornado has been troubled in the past. A £7 million contract to maintain 135 RAF Tornado F3s used in the Gulf war which was awarded in 1993 to Airworks, a private Bournemouth firm, ended in disarray after it was found that 16 of the jets were badly damaged.

The central fuselage of each of the damaged fighters was replaced at a cost of £20 million after it was found that crude holes had been drilled into the bodywork and cracks had not been repaired.

Other problems include: the Spearfish torpedo which is £186 million over budget; and two air-launched missiles postponed because it was felt that there was no need for them after the end of the Cold War. The latter are the BVRAAM, a 60-mile range air-to-air missile running 57 per cent over budget and two years late, and Casom, the anti-armour air-launched weapon which is two per cent over budget but seven years late.
 

Problems with communications equipment have been the bane of many soldiers' lives. Bowman, a new battlefield radio system which is to replace the
antiquated Clansman equipment at a cost of £2.8 billion, is six years late and 14 per cent over budget. The delay is leaving forces vulnerable to electronic
counter-measures and unable to provide secure lines.

The MoD, which has blamed rapid changes in communications for the delay, last week asked an American firm to supply VHF radios instead.

Such technological advances have been blamed for other failings. The Navy's £6 billion, 12-ship Type 45 destroyer project is seven years late because the four
governments originally involved could not agree on its design.

And the Hercules C-130J transport aircraft was made two years late when its new, British-designed six-bladed propeller created airflows over the wing that forced
several alterations.

One of the most embarrassing and costly fiascos in the sorry history of Britain's defence procurement was the decision in the later Eighties to scrap the Nimrod early-warning aircraft, due to be made in Britain by GEC, in favour
of the Boeing Awacs from the United States.

The consequence Qf cancelling Nimrod nine years after the project began meant the taxpayer had to pay almost twice as much for the country's air defence.

Almost £1 billion that had been pumped into Nimrod had to be written off when the project was finally abandoned because the GEC radar system failed to meet
the RAF's standards.

In another episode, delivery of a new fleet of almost 8,000 Land Rovers for the Army which was ordered in 1996 had to be postponed after the first batch of vehicles was found to have a brake fault. The new vehicles eventually arrived between 28 and 33 months late, by which time the cost of the contract had risen from £121 million to £205 million. It cost the taxpayer a further £23 million to keep the old fleet in operation.

Other delays have hit a new radar system, code-named Cobra, which was more than seven years late after difficulties with German components; a new anti-tank
weapon, Trigat, which was five years late; and the Rapier missile system which was six years behind schedule.

And problems have even affected procurement workers themselves. Officials were severely criticised three years ago for installing at the £254 million headquarters of the Procurement Executive in Bristol a computer system that could not communicate with the MoD's network in Whitehall.

At the end of last year, a report from the House of Commons defence select committee found that the MoD's handling of big defence projects was "weak in
almost every aspect" after 25 large-scale purchases overran by more than £3 billion and were delivered an average of 37 months late.

Armed Forces personnel know from bitter experience that whenever the MoD makes estimates in cost and time, the figures must be treated with the utmost
scepticism.

Building complicated weapons is a fraught business. Years of research can reveal countless unforeseen problems. Technological developments can mean projects agreed years in advance are overtaken before entering service. And the end of the Cold War a decade ago is still affecting long-term strategic planning.

However, the MoD has admitted that its equipment procurement arm has performed poorly even given that mitigation.

A spokesman for the department said: "Equipment procurement to the Armed Forces has got quite a bad history. We have introduced a smart procurement system which introduces a number of measures to improve the way we buy equipment for the
Armed Forces.

"We are changing things, we are bringing improvements to the way we run the business."

While pledges of "smart procurement" and "best commercial practices" are spun within the corridors of Whitehall, the troops on the frontline have little to cheer.

Challenger 2 might have finally arrived in Kosovo but at one Army checkpoint on the Serb border last week, soldiers had small, off-the-shelf Kenwood short-range walkie-talkies on the lapels of their uniforms. And, at the 7th Armoured Brigade's headquarters in Pristina, the Naafi was contracting trucks from Eddie
Stobart, the civilian haulier, to deliver supplies.
 

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