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26 April, 2006 - 18:26 By Staff Reporter

MoD snubs Marshall plan to save taxpayer £1.28bn as Blair Force One hits turbulence

The MoD is refusing to consider a Cambridge company’s plan to save UK taxpayers up to £1.28 billion on a major aircraft programme.

An Airbus-led consortium was chosen in July 2004 for a £13bn PFI contract to supply the RAF with mid-air refuellers under the Government’s Future Strategic Tanker Aircraft (FSTA) programme – but the contract has still not been awarded amid speculation of a growing cash crisis at the Treasury.

Marshall of Cambridge, part of a rival consortium that lost the tender, tabled an interim plan to boost the existing Tristar fleet at a fraction of the cost. But the MoD says it would be inappropriate to consider the proposal while negotiations with the winning Airbus consortium are ongoing.

Some government sources fear the FSTA programme could collapse altogether. The Government is understood to have already slashed its requirements from 21 to 14 Airbus A330 aircraft.

As one of these new jets costs almost $100m and there is a large black hole in the Treasury funds, even finding up to £1.4bn for the reduced requirement could be a problem. The Marshall plan involves upgrading the current Tristar fleet by buying five or six more Tristars at a cost of $2m per plane – a total of $12m at most – saving the UK taxpayer up to £1.28bn.

The proposal would bring an additional and significant financial benefit – allowing the Government to retire a fleet of existing DC10s that are 40 years old and said to be hideously expensive to maintain.

By contrast the Tristar are 25 years old and with proper maintenance are just as safe and reliable as new jets.

Business Weekly understands that the Treasury may bid to shrink the FSTA still further – if it survives – and fund a new VIP ministerial jet for the Prime Minister, other leading government figures and the royal family.

The plane – already nicknamed Blair Force One – would be commissioned from either Airbus or Boeing at a cost of around £30m. The simplest option would be to trade that off with Airbus as part of the FSTA deal.

If the FSTA programme sinks, however, then Boeing would be in the pilot seat and Marshall of Cambridge, a long-time partner of the American giant, would almost certainly win some work on the back of the project.

The MoD has already held talks with Marshall about a jet for Tony Blair, we can reveal. It was shortly after New Labour came to power and the issue was discussed relatively early in the life of the new Cabinet.

The MoD asked Marshall if it would be feasible to convert a Tristar with a suitable VIP interior but the plan was blocked by the Treasury, Business Weekly understands.


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