Publication: The Star Issued: Date: 2007-01-13 Reporter: Michael Schmidt

BAE's Hawks More Like Albatrosses

 

Publication 

The Star
Date

2007-01-13

Reporter

 Michael Schmidt

Web Link

www.thestar.co.za

 

The feisty, subsonic jettrainer, a high earner for the British arms industry, is dogged by controversy

The BAE Systems Hawk, the nimble jet trainer at the heart of the probe into whether influential South Africans, including one of President Thabo Mbeki's advisers, received multimillion-rand bribes sweetening its purchase by South Africa, is the British arms industry's sales success story - but is also its albatross.

At face value, the Hawk - of which South Africa purchased 24, stationed at the Makhado Air Force Base in Limpopo alongside Saab/BAE Systems Gripen multi-role jets - merely adds what trainer wheels would to a racing bike.

According to Helmoed-Römer Heitman, the Southern African correspondent for Jane's Defence Weekly, the world's most respected defence publication, the little subsonic two-seater would be of precious little use in real air combat.

"In my view it would be kinder to take the pilot behind the hangar and shoot him, than put him in that position," he joked.

"You can use the Hawk for photo-reconnaissance, for patrolling borders but it hasn't got the speed or the power - or the tracking radar - necessary to fly against enemy interceptors."

The Hawk can attain Mach 1.2 in a dive, enabling trainee pilots to gain experience in handling the shift to supersonic flight. Heitman said the Hawk could be used in a limited ground-attack role, but only against targets like guerrilla forces without anti-aircraft capabilities.

And it is in this secondary role that the Hawk has proven most controversial in its sales around the world - especially to Indonesia and Zimbabwe.

So much controversy raged over the sale of 16 Hawks to Indonesia during the liberation struggle in East Timor in the 1990s that three women protesters armed with hammers who had caused £1,5-million (R21-million) in damage to an Indonesia-bound Hawk were acquitted by a British jury because they had used "reasonable force to prevent a crime", recalled the BBC's Ryan Dilley.

In 2002, reports surfaced that the Indonesian Air Force had used Hawks against separatist rebels in violation of the terms of sale.

Hawks were also sold to Zimbabwe in the early 1980s - and the British government stopped the sale of spares to Zimbabwe only in 2000, well after the planes had been shown to have been used in an attack role during the multinational civil war in the DRC.

A 1985 Saudi Hawk and Tornado fighter deal has long been dogged by suspicions that big kickbacks were paid to Saudi princes, middlemen and Margaret Thatcher's arms-dealing son, Mark.

The ongoing deal, Britain's biggest arms deal, "has kept BAE afloat for the past 20 years", The Guardian reported in October last year after secret documents detailing the deliberate over-inflation by £600-million of the price of the Tornados mistakenly came to light in the National Archives.

It is out of such inflated figures that kickbacks are alleged to have been made. BAE Systems refused to comment at the time, saying the deal was strictly between the Saudi and British governments.

A probe by Britain's Serious Fraud Office (SFO) into alleged corruption by BAE Systems chiefs dating back to the 1985 Saudi deal was controversially given the axe by Prime Minister Tony Blair last month, allegedly because Saudi Arabia threatened to halt further orders from BAE Systems - but a subsidiary probe into the South African deal continues.

What later became the Hawk was on the drawing board of Hawker-Siddeley in 1968 and first took to the skies in 1974, with 176 trainers entering service with the Royal Air Force two years later. Hawker-Siddeley became the nationalised British Aerospace in 1977 - and merged in 1999 with Marconi Electronic Systems to become BAE Systems, currently one of the largest arms manufacturers in the world.

And as the industry evolved over the years, so did the Hawk, with better engines, better weapons and more efficient wing, tailfin and fuselage designs seeing it sold to air forces as diverse as those of Canada, Indonesia, Kenya, Finland and South Korea.

As BAE Systems boasts, the Hawk is currently in service with "more than 22 of the world's armed forces and is operating in environments that range from the Arctic Circle to the arid Middle East and the tropics". It has, the company says, either sold or got orders for 900 Hawks.

The version originally considered in 1998 for the new "lead-in fighter trainer" for the South African Air Force was the Hawk 100, then up against the Czech Aero Vodochody L159 and the Italian Aermacchi MB339FD.

Those like Independent Democrats leader Patricia de Lille who question whether corruption crept into the Hawk deal point out that the programme cost in 1998 for the Hawk was pencilled in at $756,5-million, whereas the MB339 would have cost only $377,7-million - less than half the Hawk's price tag.

However, Heitman said "the Hawk is in a totally different class", with a much lighter fuel consumption giving it greater range than its competitors. As such it was the only real option. *1

And in the end, it was not the Hawk 100, but the Hawk 120, that was chosen by SA in December 1999, with a more powerful Rolls-Royce engine, design improvements and a cockpit that replicates the Gripen's for a smoother trainee transition.

The price for the 24 Hawks as signed in December 1999 - excluding VAT and customs and excise duty - was R3,873-billion at the then exchange rate, Heitman said.

Currency fluctuations and inflation shifted the price over the years. In August 2000 the package price - including VAT - was R5,5-billion, compared to R4,14-billion paid at roughly the same time by the Nato training centre in Canada for 20 Hawks that lack the SAAF Hawks' radar simulator and data link.

The price was also comparable to those of the Australian Hawk 127s, all of which suggested that the price paid by South Africa was market related, Heitman said.

A cynic might suggest that if all market prices in the arms trade were overinflated in order to provide some "cream" for middlemen to skim off the top, international comparisons were of little use.

But Heitman said that what mattered was whether the systems-level selection process was above board *2, whether the price was good, and whether the seller had the capacity to provide decades of after-sales support - all of which were met *3, in his view, by the Hawk deal.

The current row involves the SFO's probe of allegations that influential South Africans like Anglovaal chairman Basil Hersov, who sits on Mbeki's economics advisory panel, were improperly paid hefty commissions from the deal.

Hersov's Caribbean-based company FTNSA was alleged by the SFO to have been paid £5,5-million by BAE Systems between 2000 and 2005.

The Mail & Guardian reported this week that Hersov admitted to having been paid for representing BAE Systems in South Africa, but said the figure of R77-million was exaggerated.

Sapa-AP reported that BAE Systems spokesperson Lisa Hilary-Tee said the company "continues to co-operate fully with the British investigation".

With acknowledgements to Michael Schmidt and The Star.


*1       This is nonsense.

A training aircraft does not need long range to be effective - just a reasonable range and a good fuel gauge to inform the pilot to go home or to find a suitable place for an emergency landing.

Regarding operating costs, the fuel consumption for the Aermacchi 339FD is some 800 litres/hour at cruise compared to the Hawk 120's 600 litres/hour, a difference of 200 litres/hour or 25%.

With government fuel costing say R5,00 per litre, the fuel consumption premium for operating the MB339FD is then R1 000 per hour.

With a price difference of  $756,5 million - $377,7 million =  $379,0 million, this would have equated to a total of 378 800 hours of flying time or 16 000 hours per aircraft. At 20 hours of flying time per week per aircraft, the price difference would have equated to 15 years of cost of ownership.

I somehow doubt that this could be a critical justification for acquiring the Hawk rather than the MB339FD.

Indeed, the term "fuel" does not appear in Chapter 4 of the JIT report. If it was a selection criterion, it would most certainly have done so.

Also indeed, in 1998 the LIFT project team determined the lifecycle cost of the Hawk 100 as US$979,0 million and the MB339FD as US$544,1 million with a cost-effectiveness index for the Hawk 100 as 8,3 (7th best out of 13 aircraft evaluated) and the MB339FD as 12,7 (2nd best out of 13 aircraft evaluated).


*2      The problem is that the selection process was not above board.

Refer to these extracts from the almost final drafts of the Auditor-General's investigation report :
"1.8 OVERALL CONCLUSION
1.8.2 There were fundamental flaws in the selection of BAe/SAAB as the preferred bidder for the LIFT & ALFA programme."

"3.2 Preference given to a bidder
During the investigation it became apparent that, during the technical, DIP, NIP and financial evaluations, as well as during the negotiation phase, preference was given to BAe/SAAB."

Refer to this extract from the final version of the JIT report :
"4.6 APPROVAL PHASE

LIFT

Note: Although the MB339FD was still the preferred option under the costed and non-costed option in terms of the military performance index, the Hawk was placed in an advantageous position under the non-costed option for the total
evaluation."

And there's more.

Only the intervention around 17 October 2001of Mbeki and his cronies to get the Three Stooges to change their reports prevented these conclusions from making it to the published version of the joint report.


*3      Simply put, all of these criteria were not met.

The selection process was fundamentally flawed and the price was not good.

The SAAF clearly preferred the MB339FD for a host a reasons including cost and such preference was supported by strict adherence to the evaluation and selection criteria.

Only Modise et al changed to criteria, certainly irregularly and probably criminally, to achieve their predetermined personal preference, being BAE's products.

There is so much documentary evidence of this, including Chippy Shaik's second set of minutes counter-acting Erich Esterhuize's set of minutes where the MB339FD was formally selected, only to have the Hawk re-included to fight and win another day.

The MB339FD may not have been the perfect choice, but it was the legitimate selection following the technical, DIP, NIP and financial evaluations by the mandated functionaries.

Regarding the LIFT and ALFA extra acquisition cost, it is not difficult to realise from whence this comes : a mere 7% (originally 12%) or R1,1 billion splodged on top by BAE as "agency fees" - that's 250 000 flying hours in a Hawk 120.