Carrier changes could see costs rise to £7bn

EXPENSIVE The cost of building the navy's new aircraft carriers is rising
EXPENSIVE The cost of building the navy's new aircraft carriers is rising
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THE cost of the Royal Navy’s two new aircraft carriers could rise by at least £1bn as a result of changes announced in the government’s defence review.

The News understands the final price paid for the Portsmouth-based carriers could rise from £5.9bn to £7bn, though this was called a ‘worst-case scenario’ by one defence insider yesterday.

The price hike comes after last year’s defence review decided a cheaper type of aircraft would fly from the carriers, which needs catapults and traps to be fitted to the ships’ flight decks.

HMS Queen Elizabeth and HMS Prince of Wales are being built by the Aircraft Alliance, a partnership between BAE systems, Babcock and Thales.

The alliance is conducting an 18-month consultation with the Ministry of Defence to determine the final cost of the carriers after the coalition government decided to ditch plans for F-35B vertical take-off and landing jets in favour of F-35C jets, which require catapults and traps to take-off and land.

The price rise depends on whether the catapults and traps chosen are cheaper traditional steam devices, or state-of-the-art electromagnetic ones – and whether they are fitted to both carriers or just one.

An MoD spokesman said: ‘Final costs are yet to be agreed and detailed work is ongoing. We expect to take firm decisions in late 2012.’

A spokesman for BAE Systems said a final £7bn price-tag for the carriers was ‘speculation’, adding: ‘As part of the Aircraft Alliance, BAE Systems is looking to get the best solution to get the right capability at the best price for the best ships possible.’

No firm decision has been made on how many F-35C jets will be bought by the MoD and whether one carrier will be mothballed on arrival in Portsmouth.

Originally, the carriers were billed to cost £3.9bn when the contract was signed in July 2008 and they were due to be in service by 2014 and 2016 respectively.

But last year the National Audit Office revealed that sum had risen to £5.9bn as a result of the Labour government’s decision to spread payments over a longer period.

In October, Prime Minister David Cameron announced the carriers will now be in service by 2020 and ordered plans for F-35B jets to be replaced by F-35Cs.