Turkey says not to pay for cost overruns over A400M project

On Thursday, a crisis meeting is scheduled in Berlin with representatives on how to share the extra costs.

Turkey says not to pay for cost overruns over A400M project

Turkish National Defense Minister Vecdi Gonul said Turkey was not willing to pay for cost overruns announced by the parent company EADS, in Airbus A400M military cargo plane project.

Gonul told reporters in Izmir Wednesday that Turkey wanted to purchase the 10 cargo planes it ordered at the agreed price.

In 2003, the A400M programme was given a budget of 20 billion euros for 180 aircraft, but development ran into problems and the plane needs an estimated 11 billion euros more for production to be completed successfully.

Gonul said there are two prevailing views of cost overruns among the client countries.

The first group wants to lower the number of orders but wants to purchase the planes at the initial rate while the other group wants to purchase the exact number of planes they ordered at the initial prices, said Gonul.

Gonul said they would not pay more as the parliament put an upper limit on the government spending on this project.

"This is not just us purchasing the planes, it's a joint production. Hence, Turkey designed, manufactured and sent in 400 million USD worth parts and components," said Gonul.

The European Aeronautic Defence and Space Company (EADS) has asked seven countries that ordered the military transport plane to cover 5.2 billion euros (7.4 billion dollars) in unanticipated costs.

On Thursday, a crisis meeting is scheduled in Berlin with representatives from Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey, the client countries, and EADS directors on how to share the extra costs.


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Last Mod: 20 Ocak 2010, 14:29
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