May 29, 2014 / 6:33 PM / 4 years ago

UPDATE 1-Canada signals decision on replacing jet fighters may come soon

(Adds comments by government minister in charge of procurement)

By Randall Palmer

OTTAWA, May 29 (Reuters) - Canada signaled on Thursday it is likely to make a decision soon on whether to replace its aging CF-18 fighter jets with F-35 stealth fighters from Lockheed Martin Corp or hold an open competition among aircraft makers.

Public Works Minister Diane Finley said on Thursday the Conservative government will finish its review of reports on how to replace its jet fighters in the coming weeks.

After running into a storm of criticism, the Conservative government pressed the reset button in 2012 on its original plan to buy 65 F-35 stealth fighters from Lockheed Martin for C$9 billion ($8.3 billion) without holding an open tender.

The government has since invited other manufacturers to provide details on their fighters, and the Royal Canadian Air Force alongside an independent four-member panel has evaluated the various options.

“Over the next few weeks, ministers will finish reviewing a number of reports relating to the evaluation of options, industrial benefits, costs and other factors,” Finley told a defense trade show.

The central question is whether to hold a competitive tender or to buy the F-35 because it is the only plane that can meet the military’s needs.

Pressed by reporters as to when the government would decide what to do, Finley said Ottawa would first review the report and then see if it had any more questions.

“We want to get this done soon,” she said, declining to be more specific.

The F-35 is billed as the only fighter that can avoid radar detection, and advocates say participation in its manufacturing program will allow Canadians to bid on supplying components for the thousands of F-35s to be bought around the world.

Opposition parties slammed the decision not to hold a tender to replace the CF-18s, which came into service in the 1980s. The government’s spending watchdog said the decision to buy the F-35s had been based on bad data from officials who had downplayed the costs and risks.

“We always knew this was going to be a difficult decision. That’s why we’ve taken so much time,” Finley said.

Lockheed’s competitors promise guaranteed industrial benefits within Canada if their planes are picked.

The three competitors are:

- The F-18E/F Super Hornet, made by Boeing Co. It is a proven aircraft used heavily by the United States, but production may stop soon. Boeing says the United States and Australia will still be flying them for decades and Boeing will still service them.

- The Rafale, made by Dassault Aviation SA. France has used it in or over Afghanistan, Libya and Mali, but no country outside of France has bought the plane.

- The Eurofighter Typhoon, built by BAE Systems Plc , Airbus Group NV and Italy’s Finmeccanica SpA . More than 390 have been delivered to a number of nations. (Editing by Peter Galloway and Marguerita Choy)

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