Revised National Budget: Covering Frigate Expenses
(Source: Norwegian Ministry of Defence; issued May 14, 2019)
(Unofficial translation by Defense-Aerospace.com)
The Government proposes to increase the framework for the defense budget by just over NOK 1.3 billion in the Revised National Budget for 2019. The largest part of this increase goes to additional expenses related to [the frigate] KNM Helge Ingstad.
Following the incident with KNM Helge Ingstad, the vessel has been secured, raised and transported. In order to cover the additional expenses for these purposes, the Government proposes an increase of the defense budget of NOK 486.3 million. In addition, NOK 165.8 million is reallocated internally on the defense budget.
The funds will be used to cover the expenses for raising and transporting the vessel, for the purchase of spare parts package and for doubling the crew on the new logistics vessel KNM Maud. Doubling KNM Maud's crew will help maintain sovereignty in Norwegian waters and to maintain Norwegian obligations to NATO.
The test cell in the company Rygge 1 AS will be an important part of the overall engine deployment for F-35 fighter aircraft in Norway. In order to further develop the company so that it becomes competitive nationally and internationally, the Government therefore proposes that NOK 172 million be allocated to a capitalization of the company. The Government plans to take over the ownership of Rygge 1 AS and lease the test cell to AIM Norway AS.
In the Revised National Budget, the Government has proposed internal redeployments in the defense budget, including:
-- NOK 100 million to increase the production of hangars for the new F-35 fighter aircraft at Ørland Air Station,
-- NOK 63 million for acquiring spare parts to better facilitate operational deliveries from maritime patrol aircraft, and
-- NOK 20 million for increased sailing in national waters to meet operational needs and increased presence in Norwegian waters.
In the bill, there are also three information cases associated with the defense sector.
The Government wishes to inform the Storting on the follow-up of the OAG's recommendations on the police and the armed forces' object security.
The Government presents a comprehensive plan for following up the work on object security. The plan includes a timetable for implementation and expected costs.
In 2019, the Home Guard is strengthened both to increase the proportion of the area structure that is practiced annually and to increase the length of the annual exercise for the entire area structure. This will also contribute to better object protection capability.
Report on the Condition of KNM “Helge Ingstad”
(Source: Norwegian Armed Forces; issued May 14, 2019)
(Unofficial translation by Defense-Aerospace.com)
Repairing [the frigate] KNM "Helge Ingstad" will probably be more expensive than buying a new frigate. Chief of Defence Haakon Bruun-Hanssen says it is obvious that it better to replace instead of repairing the frigate.
Defense Materiel Organisation has estimated that repairing the ship will cost NOK 12-14 billion and take more than five years. The cost of purchasing a new similar vessel is estimated at NOK 11–13 billion.
“Based on the figures presented here today, it seems to me obvious that the only sensible solution is to replace the capability of the frigate with something new. Then we will come back with what is a sensible solution,” says Bruun-Hanssen.
The Defence Matériel Organisation presented on Wednesday, May 15 its conclusions in the state report to KNM “Helge Ingstad” for the Minister of Defense. The Chief of Defense was also present, and was surprised at the cost of repairing the vessel.
“That it would cost a lot, I think everyone agreed with. But that it would cost more than acquiring a corresponding new frigate surprises me,” says Bruun-Hanssen.
He has not yet decided his final recommendation, however.
Reasonable to replace
“I have said previously that it is important that we replicate the capability of a frigate. We can do this in several ways, but we must analyze this in more detail and come up with what is the sensible solution. But it is always sensible to replace a frigate with a new frigate,” he says.
The status report has been prepared on behalf of the Ministry of Defense. Several external actors have made academic contributions to DMO’s work on the report.
“The loss of a frigate is serious for the Navy of Norway. Now I want to go into the report and study it thoroughly before the government will make a final decision on the future of KNM "Helge Ingstad". If the government decides that the frigate will not be repaired, the chief of defense will be asked to give a specialist military advice on how the operational ability can be replaced,” said Defense Minister Frank Bakke-Jensen.
The Defense Matériel Organisation has assessed the extent of damage, costs of repair, assessment of the time it will take to repair the vessel and costs of destruction. The report’s most important findings are:
-- The damage to KNM “Helge Ingstad” is considered to be approximately total. It would be very extensive and expensive work, but technically possible to repair the vessel.
-- Repairs would amount to NOK 12–14 billion and take over five years.
-- Construction of a vessel corresponding to KNM "Helge Ingstad" is estimated to cost NOK 11-13 billion, with a completion time of just over five years.
Technical, economical and schedule risk is lower for building a new ship compared to repairing the vessel.
-- Destruction of the vessel is estimated to cost NOK 50-100 million. This is net cost, after the sales value of metal and other materials that can be recovered is deducted.
-- Some parts may be reused after review and repair, but this will not significantly reduce repair costs. Those parts are considered most relevant as spare parts for other frigates.
-- The value of those parts is estimated at NOK 100-400 million, subject to the necessary inspections and repairs.
-- The Minister of Defense aims for a government decision on the KNM "Helge Ingstad" by the summer.