The truth on the Navy carrier debacle? Industry got away with murder
Sold 'adaptable' ships which couldn't be adapted
Analysis The Ministry of Defence is in the pillory again today, being corporately pelted for the recent unedifying sequence of events in which the Coalition government decided in 2010 to fit the Royal Navy's new aircraft carriers with catapults - and then abruptly changed its mind in 2012, reverting to the former plan which will see them able to carry jump-jets and helicopters only.
This is an adaptable design ...
The new thing today is the issue of a report by the Parliamentary Defence committee, a group of MPs which is supposed to conduct oversight on British defence matters but which under its current chairman (the Right Honourable James Arbuthnot MP) functions mainly as an advocacy organisation for the rapacious British arms industry. You can read the report here.
Much of the document is devoted to Arbuthnot's usual exhortations for the MoD to provide gold-plated deals to British weapons manufacturers. However the MPs of the committee also take time out in particular to lambast the ministry and the government over the carrier volte-face. They write:
The decision in 2010 to change to the carrier variant of the Joint Strike Fighter was the largest single procurement decision in the [strategic defence review of that year]. It is clear that the decision was rushed and based upon incomplete and inaccurate policy development ... We urge the MoD to learn the lessons of this closed, rushed and flawed decision of 2010.
Regular readers will recall the basics of the story. The ability to add catapults and arrester gear to the ships had been specified from the earliest stages of their design. The only difficulty in doing so was that the vessels have gas-turbine propulsion, not nuclear, in order to reduce costs. Gas propulsion cannot furnish the steam required by normal naval catapults. Cash-strapped Blighty also felt itself unable to cough up to develop new electric catapults, and so it was planned that at least to start with the ships would have no launch or recovery kit beyond a "ski-jump" ramp and would carry jumpjets and helicopters only.
But by 2010 the US had invented electric catapults to put on its next supercarrier, now nearing completion, and was happy to sell some to old Blighty. In perhaps the only good call in the entire 2010 defence review, the Prime Minister and the MoD team decided that they would purchase the US electromagnetic aircraft launch system (EMALS) and fit it to at least one of the British carriers.
This would mean that the associated F-35 stealth fighter buy would need to change from the F-35B jumpjet version to the F-35C catapult type, and this change generally dominated the headlines. In particular, when the government later swerved back to the jumpjet plan, it was pointed out that the F-35C, not being as far along in test and development as the F-35B, would probably not reach the British fleet until 2023 or later - so extending the long wait for restored carrier air capability.
But that was rather to miss the point. Britain having idiotically got rid of its small remaining fleet of Harrier jumpjets, the only aircraft which could possibly be obtained to fly from non-catapult ships would be the F-35B, as it is the only jumpjet now being made. It is also the most complex combat aircraft ever built, the first and only plane to combine stealth, supersonic speed and vertical thrust all in one. It is well known that, while it may arrive a little sooner than the F-35C, F-35B will be more expensive to buy and run and less capable in the air.
In truth, both F-35 variants are likely to be so expensive that Britain will never be able to afford very many of them: certainly not enough to maintain a 40-strong air group with the fleet. If we only buy F-35s, our big new carriers will sail the seas largely empty, carrying 12 jets at most.
But with a catapult ship, none of that matters as it would then be possible to use many other kinds of plane. In particular a big fleet of F-18 Hornets, as used today by the US Navy and many others, could be bought or leased very cheaply as large numbers of F-18s are already in service. The tricky question of fleet radar aircraft also becomes simple to solve once you have catapults: the Hawkeye pocket AWACS as used by the US and France becomes an option, as opposed to custom built - so, expensive - and not very capable whirlybird solutions.
Once you had a catapult carrier, the case for F-18 (or perhaps Rafales from France) would be irresistible. The ships will be there for 50 years or more, visibly cruising around more than half empty, so sooner or later some administration would be bound to cave in and buy some nice, cheap, modern non-F35 jets to fill their empty decks - if this was possible.
And as the F-18 (or Rafale) is better than any other plane now in British service for all likely missions (and perfectly good in the unlikely case of serious air-to-air combat against any plausible enemy), this would be an excellent thing all round. The carrier jet could perfectly well operate from land bases if required. The MoD might then reconsider the wisdom of keeping its current ruinously expensive-to-run and not very good Eurofighter (aka Typhoon) and Tornado fleets - certainly the aged, crappy Tornado and probably a lot of the Eurofighters too would be marked for the chop. The MoD would surely not bother expensively upgrading the Eurofighter for ground attack as it currently plans to, with the F-18 (already an excellent strike plane) on hand and a fistful of far more sophisticated F-35Cs for tricky jobs on the way.
So the catapult decision was pretty much a no-brainer once EMALS appeared. The puzzler was why on Earth it later got rescinded, on the grounds that putting catapults into the ships was not going to cost £900m - as the 2010 review had estimated - but actually £2bn for the Prince of Wales and maybe £3bn to the Queen Elizabeth. This would be to double the projected price of the two ships.
How is it 'adaptable' if adapting it costs as much as buying a new one?
This astonishing cost jump is what the MPs of the Defence Committee have been looking into. There was some foolish talk in the appendices to their report of "price-gouging by General Atomics", the makers of the EMALS. Mr Bernard Gray, mandarin in charge of defence kit, was happy to let the MPs get the impression that General Atomics had done something bad and this had caused most or all of the price increase. He told them:
On the component parts that build up the change, the cost — in particular of the catapult system — proved, on further dialogue with the US, to be significantly higher. I cannot remember the exact figure for that component, but it was of the order of 50% higher than the original estimate for that piece of equipment.
The cost of adapting the other one into this? Same as just throwing it away and buying this outright
The original estimate was US$200m (pdf here), so that would be an extra £130m-odd. Mr Gray went on:
There was also a significant component of additional technical advice, which the contractors in the US were recommending was required. That was of the order of over £150 million.
So now the cost is up by £280m - just another £3,800m or so of cost increase to account for. General Atomics tacked on still more, Mr Gray tells us:
Additional aircraft launch and recovery equipment was required, on top of the cats and traps, which had not been included in the original estimate. The cost of going through the FMS [Foreign Military Sales] purchasing route and some inflation adjustments were further components.
This last simply can't have been a big deal, as the original US$200m was to include all this:
Electromagnetic Aircraft Launch System/Advanced Arresting Gear (EMALS/AAG). The EMALS long lead sub-assemblies include: Energy Storage System, Power Conditioning System, and Launch Control System. The AAG includes: Power Conditioning, Energy Absorption Subsystems, Shock Absorbers, and Drive Fairleads. Also proposed are other items for Aircraft Launch and Recovery Equipment, spare and repair parts, support equipment, personnel training and training equipment, publications and technical documentation, software support, U.S. Government and contractor engineering, technical, and logistics support services, and all other related elements of program support. The estimated cost is $200 million.
But Mr Gray sought very hard to suggest nonetheless that the four billion pounds plus in cost increases were down to General Atomics in some way. He went on, explaining why nobody in the MoD knew the price of the carriers had almost doubled until last year:
We did not get updated prices from General Atomics until February 2012 to start to plug into the total map ... there was a long debate going on through the back end of last year about what the appropriate price should be. It was not until we got numbers from General Atomics in February that we were in any kind of position to be clear about that.
Minister Peter Luff was a bit more honest. He said:
I want to make it quite clear ... there was some increase in the cost of the equipment, but that is not actually the total picture of the cost. The cost is also a reflection of various other issues ... the cost of the conversion itself was the real issue ...
In other words the huge bulk of the cost increase didn't come from General Atomics and EMALS. Instead it came from the British shipyards who would have to put the US equipment into the ships. Luff went on to explain that in fact the carriers had not been designed to accept catapults and arrester gear at all.
The fundamental misunderstanding that many of us had was that these carriers would be relatively easy to convert and had been designed for conversion and for adaptability. That is what we were told. It was not true. They were not.
Mr Arbuthnot, reasonably enough, asked:
Having been “designed for conversion”, and conversion having proved far more expensive than we expected, do we have any comeback against those companies that did the design?
Mr Gray answered:
Because the decision to go STOVL [that is the initial decision for jumpjets] was taken in, from memory, 2002, no serious work had been done. It had been noodled in 2005, but no serious work had been done on it. It was not a contract-quality offer; it was a simple assertion that that could be done, but nobody said, “It can be done at this price”, and certainly nobody put that in a contract.
This is a very strange position to take. The decision that was taken in 2002 was not to "go STOVL". It was to choose the design option then referred to by the government as the "adaptable CVF Delta design", with "adaptable" specifically to mean that catapults and arrester gear could be added to the ships - not just during construction, but afterwards. A STOVL [jumpjet] only, non-adaptable design was also considered, and the "adaptable" design cost a hell of a lot more. In 2002, Parliament was told:
The estimated cost based on a STOVL [only] design was around £2 billion ... The estimated procurement cost of the future aircraft carriers using the innovative, adaptable design is around £3 billion.
The "innovative, adaptable" ships are now projected by the National Audit Office to cost £5.35 billion, so it's plain that around a third of that, some £1.8bn, comes from them being "adaptable" rather than STOVL-only. Except that it turns out they aren't adaptable at all - fitting them with catapults and arrester gear would, apparently, cost as much as buying two entire new ships.
That has to be a colossal contract violation by the builders: there's no way it can't be, provided the word "adaptable" is actually on the contract somewhere (this is a secret of course, like all MoD contracts). No matter what, the shipbuilders cannot realistically claim that the MoD didn't specify that it should be easy to put in catapults and arrester gear, and they cannot realistically claim that there is any adaptability at all in a ship which costs as much to adapt as it would to just buy a new ship. But the MoD just bends over and bites the pillow held out for it.
This is not even to mention that the builders have a serious conflict of interest here, in that they stand to lose a lot of money if the Royal Navy gets catapult ships and Britain gets some F-18s or Rafales - as it more or less certainly would in the end, once we had mostly empty catapult ships sailing around (the Royal Navy even had pilots flying F-18s with the US Navy in preparation). But the carrier shipyards are mainly owned by BAE Systems plc, the US-centred but UK-headquartered multinational which also made and lucratively maintains the Eurofighter and the Tornado - the jets we would seldom bother using and in many cases might not bother even having, if we had some F-18s.
This is all especially distressing, as Mr Bernard Gray is widely believed along Whitehall to be a defence procurement genius. A former Financial Times journalist and later a Labour defence "spad" - special adviser - he has now been brought in to the civil service proper and put in charge of defence kit specially to sort out the horrific mess of the MoD's equipment programme and get some value for money for Britain's cash-strapped forces.
But it turns out he's just as supine toward BAE, and just as keen to obscure that reality by slippery testimony, as all his predecessors. ®