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GREEN LIGHT FOR NH90

The specially erected glass pavilion near the Eurocopter chalet looked auspicious, and, sure enough, on the afternoon of 8 June Walther Stützle (State Secretary, German defence ministry), Jean-Yves Helmer (Armaments Deputy, French defence ministry), Marco Minniti (State Secretary, Italian defence ministry) and Jan Fledderus (Director General Armaments, Dutch defence ministry) all stepped inside. In a brief ceremony they signed an "intergovernmental agreement on the joint procurement of the NATO NH90 helicopter".

This long-awaited step was naturally greeted with applause by the assembled officers and managers from industry. After all, the NH90 is the biggest ever helicopter programme to have been launched in western Europe and it also has considerable export potential. But when they heard the numbers of aircraft to be procured, most of those present must surely have felt confused, for much had changed in the space of only a few weeks.

The memorandum of understanding now runs to 366 aircraft, significantly more than had been expected. The value of the contract (at 1 January 1999 prices) is euro 9 billion ($8.5 billion), and deliveries will be phased over a period running from 2004 to 2013. According to German State Secretary Stützle, Germany will purchase 134 tactical transport helicopters (TTH), worth DM 7.2 billion ($3.5 billion) at December 1999 prices.

But the planned fixed price contract with industry was not signed in Berlin. Evidently on the recommendation of the Auditor-General's office, the German Bundestag's Budget Committee had dug their heels in and were demanding further information. This needed to be provided as soon as possible as the final tender currently under negotiation with industry would only be valid to the end of June.

This specifies that 25% of the costs of the preproduction phase are to be borne by the consortium companies Eurocopter, Agusta and Stork Fokker, and that the initial batch will comprise 298 machines, of which 55 machines have been declared as options. According to joint venture company NHIndustries, this initial production contract is worth a total of euro 6.6 billion ($6.25 billion).

It is virtually impossible to work out the unit cost of one helicopter from these figures, as the seven Services involved have between them specified no fewer than 17 variants of the NH90. In principle there is a maritime version and a transport version, but each country is procuring different equipment, for example, different radio sets. Nor is there one standard engine. Italy is ordering the T700/T6E1 from General Electric/Fiat Avio, whereas France, Holland and now Germany as well have chosen the RTM322.

Germany has not yet committed itself to purchasing the maritime version. By contrast to the other countries, it is apparently felt at the German defence ministry that the technical risks at the present state of development are so high that they can not be covered in appropriate contractual clauses. As far as the combat SAR version for the German Air Force is concerned, a separate development contract may be signed this year. The aim is to tackle this version jointly with the Italians.

But despite these inconsistencies, the intergovernmental agreement on the NH90 is still a major step forward, and above all it strengthens NH Industries' hand in the drive for export orders. All the company's efforts are currently directed at the Scandinavian countries Sweden, Denmark, Norway and Finland, which have issued a joint invitation to tender. Between them they have a requirement for 70 to 90 aircraft, with first delivery in 2003.

NHI believes its solution is the best technical fit to the requirements and also that it can hold its own on price. Based on its figures, the fly-away price (excluding VAT) of a fully fitted TTH is around euro 15 million euro ($14.2 million) and for an NFH it is approx. euro 25 million ($23.5 million). When one takes inflation into account, these prices are even more favourable than those originally put forward ten years ago, industry claims.

From page 30 of FLUG REVUE 8/2000