The total costs of New Zealand's Lockheed Martin F-16 lease from the USA is expected to top NZ$1.2 billion ($618.6million) over the next 10 years, nearly double previous disclosures on the value of the contract.
The deal, however, is expected to save the country NZ$831 million over the lease period, compared to the cost of retaining the Royal New Zealand Air Force's (RNZAF) McDonnell Douglas A-4 Skyhawks to 2011 and acquiring a replacement from 2006.
According to estimates contained in Cabinet papers released by defence minister Max Bradford, the cost of the longer-term replacement would total NZ$2.09 billion. The papers estimate a new fighter acquisition after 2006 would cost a minimum of NZ$1.7 billion.
The papers confirm that the back-to-back five-year F-16 lease arrangement will see New Zealand pay NZ$124.8 million for the provision of aircraft. The total capital equipment component is expected to cost NZ$775.2 million over 10 years, including a NZ$267 million aircraft reactivation package and facilities works.
The total operating costs of the F-16s over the lease period are projected at NZ$358.5 million, compared to NZ$334.5 million in A-4 operating costs.
The papers reveal that the Cabinet has endorsed an increase of NZ$150 million in allowances for the RNZAF to support F-16 operations over the lease period.
A further NZ$42 million has been set aside to cover the "purchase of equipment to allow the aircraft to be deployed into hostile situations and a structural integrity maintenance system". This includes an electronic countermeasures pod and a targeting and navigation pod. Money has also been put aside for simulators and a small purchase of guided munitions.
The papers show a major upgrade is planned after the full lease if the aircraft is purchased.
Source: Flight International
