The Spanish government cabinet on July 26 approved additional expenditure of €877.33 million in the 2013 budget of the Ministry of Defence, to finance payments that come due this year on several major weapon and equipment programs, as proposed by Undersecretary of Defence Pedro Argüelles.
The cabinet also decided to adopt substantial reductions in some major procurement programs, like Eurofighter, Airbus A400M and NH90, which has been floated as a trial balloon by the ministry of defense in May.
Announcing the approval of the extra funds, Deputy Prime Minister Soraya Saenz de Santamaria said that these funds will not count towards the national deficit, as they fulfil obligations incurred many years before."
While the decision to reduce the number of Eurofighter combat aircraft has been deployed until 2015, Spain will operate only 14 of the 27 Airbus A400Ms it is committed to buying, and will try to sell the other 13 to other countries.
“Contractually, Spain has to take all of the 27 A400Ms it has ordered,” a spokesman for Airbus Military told defense-aerospace.com July 29, “but if it wants to sell some of them, we have nothing to say.” He also said that the first 14 aircraft are due to be delivered by 2020, and that a decision to sell off the aircraft on will not be taken until after then, “so it’s still some time off.” He added that Spain’s final 13 A400Ms would be delivered in an austere configuration, without many mission systems, to reduce cost.
The NH90 helicopter program is also slated to take a very large hit, as the number on order is reduced from 45 to 22, while the numbers of Tiger combat helicopter (6 to be sold off) and Leopard II main battle tanks (reduced from 190 to 117) are also being reduced.
The Ministry of Defence says that the extra funds will be used to pay down 15 major weapons programs, but will not be used to fund ongoing development programs, such as the Pizarro tracked vehicle or the S-80 submarine.
Over one-third of the total, or €337.5 million euro, will go to finance Spain’s share of the Eurofighter program. Almost €163 million will be paid to the state-owned shipbuilding company, Navantia, for the Juan Carlos I amphibious ship and for the frigate F-105 Cristóbal Colón it is building for the Spanish navy. The Tiger helicopter requires payments of €88.26 million, and €46.6 million will be paid down on the Airbus A400M transport aircraft.
Several smaller acquisition projects will benefit from the extra budget envelope, including the as 34.58 million Spike missile program (€34.5 million) the 155/52 howitzer (€32.5 million) and the combat supply ship, Cantabria (€28 million).
Argüelles told the Cortès that the defense ministry will require between 800 and 1000 million euro, over and beyond the planned defense budgets, to meet acquisition payments coming due in 2013, 2014 and 2015.
He also said that the ministry had negotiated the due amounts with industry, and this, together with cuts in the numbers of systems being procured, had reduced the total equipment bill by about €3.8 billion .