Cost of Canada F-35 jets to soar, Ottawa eyes alternatives -CTV network

Thu Dec 6, 2012 6:34pm EST

* Report is latest problem for troubled F-35 program

* Alternatives include fighter jet made by Boeing

OTTAWA Dec 6 (Reuters) - Canada's planned purchase of Lockheed Martin Corp's F-35 stealth fighter jets is set to soar in cost and the government will start looking at alternative planes, the CTV network reported on Thursday.

The report is the latest embarrassment over the F-35 for the Conservative government, which announced in July 2010 it would buy 65 of the Joint Strike Fighters for C$9 billion.

Ottawa consistently brushed off critics who said the figure was too low, but had to launch a formal review of the project in April after a spending watchdog said the initial decision to buy the jets had been based on bad data from officials who deliberately downplayed the costs and risks.

CTV, citing unnamed sources, said the government would next week release an independent study showing the cost of buying and maintaining the jets was in fact around C$40 billion ($40.4 billion), much higher than the initial estimate of C$25 billion for purchase and maintenance.

CTV did not say what time period the C$40 billion covered. The C$25 billion estimate was for 20 years.

The television network also said Ottawa would launch a new review of how best to replace its aging fleet of CF-18 fighters, which will be retired in 2020, and could remove the need for the new jets to have stealth capability. Possible alternatives include Boeing Co's F-18 Super Hornet.

The $396 billion F-35 program, the largest in Pentagon history, is already late and well over budget.

The Canadian Defense Ministry did not hold an open competition to replace the CF-18s, saying the F-35 was the only plane that could meet all of Canada's requirements.

In April, Ottawa responded to the spending watchdog's criticism by stripping the Defense Ministry of responsibility for buying new jets and handing it to the Public Works Ministry.

No one in the office of Public Works Minister Rona Ambrose was immediately available for comment.

Lockheed is developing three variants for the U.S. military and eight partner nations: Britain, Canada, Italy, Turkey, Australia, Denmark, Norway and the Netherlands.

FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article