Bidders are still hoping for a Chilean fighter decision by the end of June, despite the certainty of a cut in the armed forces' procurement budget because of falling copper prices. Boeing, Dassault, Lockheed Martin and Saab submitted best and final offers for between 12 and 24 aircraft in late May. A decision could be delayed until later this year.
Under a law enacted by the former military regime, the armed forces receive 10% of Chile's copper export revenues to pay for new equipment. This amounted to $282 million last year, when the price of copper averaged $2.27/kg. In the wake of the Asian economic crisis, this has dropped to $1.76/kg.
State copper exporter Codelco says its revenues fell by two-thirds in the first quarter of the year, to just $130 million, compared with $330 million in the first three months of 1997. If the military's share of copper revenues for the year falls below $220 million, law requires the Chilean Government to "top up" the procurement budget. This will limit the impact of the price fluctuations, but complicates the budgeting process.
Local analysts expect the selection of a new fighter to go ahead, possibly with a slight delay, because the aircraft will be paid for over an extended period. The drop in copper revenues, however, could affect other procurement programmes, including the acquisition of weapons for the fighter.
The four aircraft in contention for the initial order, which is to replace the Chilean air force's Cessna A-37s, are the Boeing F/A-18C/D, Dassault Mirage 2000-5, Lockheed Martin F-16C/D and the Saab/British Aerospace Gripen.
Source: Flight International
