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Bidders Sought For Ground-Breaking Air TankerPrivate Finance Deal

The Ministry of Defence is looking to the private sector to provide an air-to-air refuelling service for the RAF in a ground-breaking Private Finance Initiative deal.

Six consortia have been asked to submit outline proposals to design, supply, manage, operate and fund a service to replace the RAF's existing air tanker fleet. The project could be worth up to #9 billion over 20 years.

Defence Procurement Minister Baroness Symons said:

"The Future Strategic Tanker Aircraft project is by far our largest and most innovative PFI proposal to date, and offers the opportunity to work in partnership with industry and to show that private finance can work for challenging projects of this nature.

"The government will ensure that the RAF operational effectiveness will be maintained, and that the project will deliver real value for money to the taxpayer.

"Responses to our Request for Information from industry earlier this year showed strong private sector interest in the new commercial opportunities FSTA brings. These include the management of the main operating base and using spare capacity for earning third party revenue from other users, including perhaps other allied air forces, at times when the tankers are not needed by the RAF.

"I look forward to industry producing innovative and well thought-out proposals. A final decision on the way ahead is planned in 2002, and FSTA could enter service as early as 2004.

"We will, of course, keep those likely to be affected by the decision fully informed as our thinking develops and are committed to full consultation with the Trades Unions."

The six consortia invited to submit outline proposals are led by: - Raytheon, - Rolls-Royce, - British Aerospace, - Brown and Root, - Serco Group with Spectrum Capital Ltd, - FRA-Cobham with Thomson-CSF

The consortia are considering a number of aircraft types as candidates for FSTA, including the Airbus A310 and A330 and Boeing 767 and DC10. Both new and second hand aircraft are being considered.

Background Notes : +The Ministry of Defence has signed 26 PFI projects to date, with a total value of 3bn pounds representing private sector investment of 1bn in defence infrastructure. Over 90 other projects, with an estimated capital investment of 6 billion pounds, are in train. Most are in support areas, but some involve provision or close support of equipment deployable in operational theatres. MOD's PFI programme, one of the largest in government, is co-ordinated by its Public Private Partnership Unit, based in London.


Bidders Sought For Ground-Breaking Air TankerPrivate Finance Deal