UPDATE 2-Canada to restart fighter search, could buy F-35-source

Fri Dec 7, 2012 3:46pm EST
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* Canada's planned purchase of F-35 had hit problems

* F-35 on shortlist with Boeing's F-18, Eurofighter: source

* Panel to study jets, report back by early 2013

By David Ljunggren

OTTAWA, Dec 7 (Reuters) - Canada is restarting its search for new fighter jets but could still choose Lockheed Martin Corp's F-35, which Ottawa had initially said it would buy before losing enthusiasm as cost estimates soared, a government source told Reuters on Friday.

An independent four-person panel will study the F-35, Boeing Co's F-18 Super Hornet and the EADS Eurofighter and report back to Ottawa by early 2013, the source said. The panel, which could also look at other fighters, will not make a recommendation on which jet to buy.

The decision marks a determined effort by the Conservative government to end a series of embarrassments after announcing in July 2010 it intended to buy 65 of the Joint Strike Fighters for C$9 billion. The planes were supposed to replace Canada's veteran CF-18s, which will be retired in 2020.

Canada is one of eight international partners helping to fund development of the new radar-evading warplane, but it has not signed a formal contract to buy the planes from Lockheed Martin. Ottawa had decided to proceed with the purchase without holding an open competition after military officials said the F-35 was the only plane to meet all their needs.

The Pentagon's F-35 office declined to comment, saying it is a Canadian issue.   Continued...