* Costs seen coming down from Pentagon projections
* Dutch F-16s being phased out by 2023
* Netherlands joins six countries in Lockheed project
By Anthony Deutsch and Andrea Shalal-Esa
AMSTERDAM/WASHINGTON, Sept 17 The Netherlands
said it will buy 37 F-35 Joint Strike Fighter planes and may
order more if funds become available, in a decision that should
end years of political wrangling over ballooning costs and
The Dutch government's announcement in its budget for next
year was a boost for Lockheed Martin and Washington,
which had urged the Netherlands in April not to turn to other
suppliers because of fears of rising costs in a project that has
been blighted by technical faults and delays.
"The government has decided, on operational, financial and
economic grounds, to select the F-35 as the new fighter aircraft
for the Netherlands armed forces," Defence Minister Jeanine
Hennis-Plasschaert said in a policy paper setting out her
long-term vision for the armed forces.
She said the government had the resources to order 37
fighters initially and could add more, finances permitting.
"If, within the given financial parameters, room is created
in the coming years to purchase more aircraft, the Defence
organisation will do so. This may be the case if the contingency
reserve is not used in full and if the price per unit of the
F-35 turns out to be lower than is currently expected."
The decision brings the number of countries with firm
commitments to purchase the F-35 to seven after Britain,
Australia, Italy, Norway, Israel and Japan also placed orders.
The F-35 is designed to be the next-generation fighter for
decades to come for U.S. forces and their allies in NATO.
The F-35 programme, hit by technical faults, is several
years behind schedule and 70 percent above early cost estimates.
The Dutch, who are phasing out their F-16s by 2023, had
initially planned to buy 85 F-35s, but people close to the
discussions said earlier this year they wanted to scale back the
order to between 52 and 68 amid deep budget cuts.
Some Dutch politicians, concerned about rising costs, had
suggested going for an alternative such as Saab AB's
Gripen, Boeing Co's F/A-18 E/F Super Hornet, or the EADS
The reluctance by the Netherlands prompted the U.S.
Department of Defense in April to urge The Hague to reconsider,
saying it could end up paying more in the long run.
The price of the jets would be around $85 million, including
inflation, according to the most recent Pentagon projections.
But actual prices for the F-35 have been coming in about 10
percent lower than that figure, one source familiar with the
The Dutch government has budgeted 4.5 billion euros ($6.01
billion) for the warplanes and an additional 270 million euros
per year in operating costs.
BELGIAN DECISION NEXT YEAR
The Dutch announcement could help strengthen Belgium's
interest in the F-35.
A Belgian defence ministry spokesman said existing jets
would have to be replaced at some stage, but no decision would
be taken before the new government took office.
Belgium had not joined the Netherlands, Denmark and Norway
in helping fund development of the F-35, although it was one of
the first NATO countries to buy the Lockheed F-16 fighter.
Richard Aboulafia, aerospace analyst with the Virginia-based
Teal Group, said the Dutch announcement and news of Belgium's
interest in the F-35 were good news for Lockheed, which has
sought to shore up commitments from international partners
despite moves by the U.S. government to defer production in
recent years, leading to some price increases.
It also comes as South Korea is nearing a decision to buy
Boeing Co's F-15 fighter, and while Denmark and Canada, two
countries that helped fund the jet's development, have restarted
their fighter competitions.
"It's a boost to the program to have the Netherlands back in
the fold," Aboulafia said, noting that the real threat had been
that the Netherlands would follow Denmark's lead and launch a