PARIS --- Spain has signed a 1.38 billion-euro contract to buy a second batch of 23 NH90 helicopters, French media reported in late December, confirming the Spanish cabinet’s Nov. 16 decision to approve contract signature. The contract amount is before value-added tax.
This is especially significant for Airbus Helicopters and Leonardo Helicopters, the main shareholders of the NH Industries joint venture company that is the program’s prime contractor.
Spain’s 23 additional NH90s will be split between the three services, with ten going to the Army, six to the Air Force and seven to the Navy, which will use them to replace its oldest S-60B Skyhawks. The Air Force and Army will replace the Eurocopter AS-332 Super Pumas that are now in service.
This new purchase, following several procurement decisions announced in recent weeks and worth nearly 10 billion euros for F-110 frigates, S-80 submarines, Piranha wheeled armored vehicles, Eurofighter upgrade, Chinook procurement and other smaller programs raises some questions about how Spain’s new government will be able to fund such a large and expensive range of new weapons in addition to its annual budgets.
Spain’s NH90 order follows a long-deferred order for 28 NH90s by Qatar, which was finally made effective in July when the down payment finally arrived. This means that a total of 51 new export NH90s were ordered in 2018, which will extend the production line and substantially improve the order book and cash flow position of the NH Industries shareholders, which in addition to Airbus and Leonardo also include Fokker.
This is our translation of the Spanish Cabinet’s Nov. 16 decision to authorize the NH90 contract:
Contract for the Supply of 23 NH-90 GSPA / MSPT (PHASE II) Helicopters
The Council of Ministers has authorized the conclusion of the manufacturing supply contract for 23 NH-90 GSPA / MSPT helicopters (phase II), for an estimated value of 1,381,073,714.86 euros.
The object of the authorized contract is the acquisition of 23 NH-90 GSPA / MSPT helicopters destined for the helicopter fleet of the Ministry of Defense, which will be operated by the Army, the Air Force and the Navy. The estimated value of the contract (excluding VAT) amounts to € 1,381,073,714.86, and has a term of validity from the signing of the contract until November 30, 2028, including annuities from 2018 to 2027.
Conclusion of the authorized contract will avoid the excessive aging of helicopters in service if not renewed by 2022 (62 helicopters) which would cause a considerable increase in maintenance costs, operational attrition losses and an increase in unscheduled breakdowns that could eventually diminish flight safety.
The helicopter fleet renewal program began in 2006 with the acquisition contract of 45 NH-90 helicopters, but due to budgetary restrictions at the time, this contract did not contemplate the acquisition of any type of logistic support, equipment of mission, price review, simulators, mission planner and automatic bank, which determined that finally only 22 units were acquired.
Given the nature of the contract (helicopter manufacturing and supply) there are exceptional circumstances that allow extending the duration of this contract for a period exceeding five years, as was recognized by the Council of Ministers when authorizing the increase of limits to acquire commitments of expenses charged to future years on September 7.
In this new acquisition of 23 helicopters, given the urgency of the renewal of the helicopter fleet of the Navy SH-3D Sea King, it is necessary to acquire a new naval configuration of NH90, so the helicopters to be supplied are distributed from the following way:
-- 16 GSPA STD 3 helicopters (ground-based version).
-- 7 MSPT STD 3 helicopters (naval version).