T31e program is now a more "normal" purchase. I guess, now there is no big difference to T26's contract, as;
1: FX risk and inflation risk is taken by MOD, not by industry,
2: GFE not included in the total cost.
I think "items-1" is the most important. The bidders are commercial farms. If they do not add up significant (say, 10-20%) margin cost for financial risk, their stakesholder will not allow to bid. Risk is cost
. If MOD is not taking this risk, industry will "cost" it to MOD. Clear.
But, please note that this does not mean "more than 1.25B GBP for 5 hulls". Until Today (if it is 20%), it was "the 1.25B GBP is actually 1B GBP for build and 0.25B for financial risk-hedge". From now on, it is "1.25B GBP for 5 hulls".
The FX risk hedge part benefits Arrowhead 140 and possibly MEKO A200, for sure. [EDIT] I rethink this part. If RN/MOD do not like the FX risk, they will try to avoid it. "Not taking risk" could be a strong argument.
Item-2 makes us re-think of many things. MOD/RN need to think by themselves, "what is the best choice for UK"?
A: Is it better to export the 5 T23GP to Chili/Brazil, or scrap them to transfer equipments to T31e (and T26) ?
- Export will "distribute" UK-origin CMS, guns, CAMM-missiles in these countries, which will greatly benefit UK industries. Note that maintenance/logistic cost is the key, not only the sells price. This will also reduce the maintenance/logistic cost of RN escorts.
- Scrapping 5 T23GPs will enable transferring, guns (114 mm and 30 mm), Artisan radar, ESM/ECM/decoys (including torpedo defense), CAMM front-end control electronics, CMS consoles (and may software), and many other "RN" equipments. In this case, of course the Leander team will benefit the most, because of the highest commonality to T23GP equipments/CMS. Arrowhead 140 with Thales as a major member will not use the BAE CMSs. All other equipments are "new" to TACTICOS, so needs development cost, and all these cost is still "within" the 1.25B GBP. I guess Altas bid has the same problem.
B: How many GFE are "reserved" by UK, without binning 5 T23GP?
- CIWS will be from the "pooled 50".
- Some 114 mm guns, taken from T42s, are still held? (or all scrapped?).
- Some S2050 hull sonars, taken from T42s, are still held? (or all scrapped?).
Are there any good info on this part?
Overall, this does not mean the total cost is increased, and probably cut in other place is needed if more money/GFE are to be needed. In other words, we can "mix" the whole cost of SSS (1B GBP), T31e (1.25B GBP for build + 0.25B other), T23 export probability, and even part of the MHC hull-part cost (but maybe not the FLSS cost), and re-think the best balance.
To do so, I think we need time. (continues to my "normal proposal" to delay T31e for 2 years, to see SDSR2020 outcome