UPDATE 1-Sweden to buy 40-60 next generation Saab Gripen jets

STOCKHOLM/ZURICH Sat Aug 25, 2012 12:22pm EDT

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STOCKHOLM/ZURICH Aug 25 (Reuters) - Sweden said on Saturday it would buy 40-60 new JAS 39 Gripen fighter jets from aerospace firm Saab after inking a deal last year to share some of the development costs with Switzerland.

Sweden has not previously said how many of the next generation Gripen planes it would buy, although its development partner for the jet, Switzerland, said late last year it would buy 22 at a cost of 3.1 billion Swiss francs.

"The partnership with Switzerland means that together we can procure and operate a high-capability fighter plane programme at a lower cost than we had been forced to pay if Sweden had procured (the jets) alone," Swedish Prime Minister Fredrik Reinfeldt said in a newspaper article signed by the leaders of all four parties in the ruling Alliance.

But the head of Switzerland's Free Democrats (FDP) indicated in a newspaper report that his party was unlikely to support the country's planned purchase of 22 of the jets, which could scupper the Swiss side of the deal.

Switzerland's parliament is expected to vote on the controversial purchase to replace aged Northrop F-5E/F Tiger fighters, in October. In order for it to pass, the pro-business FDP must back it.

Asked by the Neue Zuercher Zeitung whether the FDP would pull the plug on the deal, party president Philipp Mueller said:

"At least, we're about to do so. It has been known for some time that there are a lot of question marks surrounding the Gripen order."

Mueller cited questions about the yet to be developed technologies used in the jets and the chance of cost overruns as reasons to object to the purchase.

The government opted last November to buy 22 JAS-39 Gripens. But the decision is unpopular with some because it will require spending cuts in other areas, such as education. The issue may even be put to a referendum in Switzerland.

"We will fight for a good, effective and financially viable fighter plane," he said. "Given our knowledge today, the Gripen doesn't fulfill the requirements to succeed with the people."

But the Swedish prime minister said Sweden needed the planes, expected to come into service in 2023, to defend its territory and carry out its international commitments.

Purchasing the jets would not come at the expense of other military spending and would be good for Swedish industry, he said.

"The decision is necessary in terms of our defence capabilities, but also positive for Swedish jobs, Swedish exports and Swedish research and development," Reinfeldt said.

Sweden's agreement with Switzerland includes sharing the costs for training pilots and mechanics, maintenance and future upgrades to the plane during its expected 20 year life-cyle. (Reporting by Simon Johnson and Catherine Bosley; Editing by Hugh Lawson)

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