Budget May Force U.K. Carrier Delays
By AMI INTERNATIONAL INC.
The U.K. Royal Navy’s Queen
Elizabeth-class aircraft carrier
program, formerly CVF, may be
delayed due to funding shortfalls.
Industry sources indicate that the
program may slip by up to 18
months, pushing the keel-laying of
the first unit to 2010.
This information follows the
mid-2007 decision to move forward
with the carrier program when the
Ministry of Defence (MoD) awarded a detailed design and manufacture contract to a BAE Systems and
Thales-led team worth $7.57 billion, to start the program.
The funding shortfall would
essentially slow down the construction phase, delaying the delivery of
Queen Elizabeth to around 2016 and
Prince of Wales to 2018.
Even though some circles suggest
the Queen Elizabeth program could
or should be canceled altogether,
other sources say it is a program too
vital to the health of Britain’s shipbuilding industry and the future of
the Royal Navy to cancel in its
entirety. A slowdown to allow the
defense budget to catch up, these
sources said, is probably the best
solution for the program.
For Cost Savings
Australia’s Department of Defence
(DoD) has been ordered to find as
much as $9.03 billion in savings
over the next decade. The Australia
government has ordered the savings across all major departments
in order to reign in ballooning
costs. Although the defense budget
will continue to grow in real terms
by 3 percent annually, the government projects that operating and
sustaining the force may be much
costlier than originally projected.
Sources indicate that most of the
savings can be achieved by reducing or freezing DoD civilian staffs
as well as implementing other effi-ciencies within the department.
With regard to naval programs,
sources say it appears that the
Hobart-class air warfare destroyer
and Canberra-class amphibious vessel programs are safe, assuming that
the projects move forward on schedule with no major cost overruns.
However, a fourth Hobart-class
destroyer, which has been under discussion since June 2007, may be in
danger, with its fate largely resting
with a new “Defence White Paper,”
which was announced in early
March, and the success of the ordered
savings over the next several years.
AMI INTERNATIONAL INC. ILLUSTRATION
Keel-laying for the first unit of the U.K. Royal Navy’s Queen Elizabeth-class aircraft carrier program may now be delayed until 2010.
Russia to Increase
Russia’s Defense Ministry will
increase defense spending to more
than $40 billion, 20 percent more
than what was reportedly spent in
2007. Russian Deputy Defense
Minister Lyubov Kudelina stated,
“The Defense Ministry will spend a
little less than 1 trillion rubles [$42.3
billion] in 2008, which is about 20
percent more than last year.”
She also stated that between
2008 and 2010, defense spending
would account for nearly 16 percent of the total federal budget
expenditure, adding that most of
the funds would be spent on procurement and repair of military
hardware, research and development and construction programs.
Although the amount to be
spent on procurement was not
specifically stated, in 2007 more
than $12 billion was spent on procurement, which represented a 20
percent increase from 2006 figures.
Although the manpower requirements of the Russian military
has been reduced to about 1. 1 million, defense spending continued