The UK's experience could prove useful to the Australian
Government which is looking at potential areas where Public Private
Partnerships could be applied
AirTanker Limited has signed a 27-year contract with the
UK's Ministry of Defence for the provision of an advanced Air
to Air Refuelling and Air Transport capability for the Royal Air
This £2.485 billion deal, the world's largest ever
Defence Private Finance Initiative, closed on 27 March 2008 some
four years after AirTanker was named preferred bidder. The total
through-life cost of the FSTA project is estimated at £13
The Australian Government is currently looking at potential
areas where Public Private Partnerships could be applied in
Australia. Thus the details of this transaction will be of interest
both to Government and the private sector. It is to be hoped
however that the inordinately long length of time to reach close
after preferment is not repeated in any Australian transaction. The
Australian approach to bidding and closure of PPP deals is
different to that used in the UK and should produce a quite
The AirTanker Limited consortium includes:
EADS - responsible for designing, developing and converting the
tankers ready for delivery as well as providing support
Rolls Royce - provision of engines;
Cobham - refuelling equipment and aircraft conversion;
Thales UK - avionics, simulators and training services;
VT Group - infrastructure and facilities management.
The transaction was financed by seven banks led by the Bank of
Scotland, the others being RBC Capital Markets, Calyon, Lloyds,
BayernLB, BBVA and Fortis.
The Future Strategic Tanker Aircraft (FSTA) contract promises a
2011 delivery date for a fleet of 14 new tanker aircraft based on
the Airbus A330-200 and each powered by two Rolls Royce Trent 700
engines. The deal includes the provision of all necessary
infrastructure: a state of the art 2-bay hangar, training,
maintenance, flight operations, fleet management and ground
services to allow global Air-to-Air Refuelling and Air Transport
missions. The infrastructure building programme commenced in May
2008 at RAF Brize Norton in Oxfordshire and is expected to directly
sustain up to 3,000 long-term jobs and indirectly sustain up to a
further 4,500 jobs.
Under the PFI arrangement, the RAF will pay for a service on the
basis of availability and usage which will be provided by the 14
aircraft acquired by AirTanker and flying in RAF colours. The
through-life risks of ownership will lie with industry. It is
anticipated that RAF will not need all of the FSTA all of the time,
so that AirTanker will be able to earn extra revenue by using spare
aircraft for commercial operations. However, the RAF will have
first call on all aircraft in an emergency.
Tanker aircraft are being procured under a fixed-price contract
with the Military Transport Aircraft Division of EADS. Conversion
of the aircraft follows the similar A330-200 MRTT tanker programme
for the Royal Australian Air Force which is three years in advance
of the FSTA project and currently in the final stages of flight
tests before delivery next year. The design of the A330-200 allows
it to fulfil its required roles for the FSTA deal without
reconfiguration, except for some specialist medical evacuations.
The fuel necessary for refuelling operations and the aircraft
itself is carried within the existing tanks in the wings and
fuselage. This leaves the cabins free for transporting up to 290
personnel while the cargo hold remains available for military
equipment up to a maximum payload of 44 tonnes.
The FSTA will replace the RAF's 1960s fleet of 19 VC-10 and
9 Tristar aircraft, providing twice the refuelling capability of
the VC10s. The new aircraft's total fuel dispensing rate is
approximately 80 litres per second while also offering substantial
operational enhancement through the aircraft's own fuel
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