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06 Apr04. Dassault Aviation SA said Tuesday that Defense Ministry budgeting problems should not be allowed to delay development of the new Rafale fighter plane. Dassault said a funding squeeze at the DGA defense procurement agency, not cost overruns, was responsible for a budget crunch that threatens to delay the fighter program.

“It’s not a question of costs getting out of hand,” said Dassault senior vice president Gerard David.

“It’s the financial management of the program by the DGA that’s causing the problem,” David told The Associated Press by telephone.
French financial daily Les Echos reported Tuesday that a senior Defense Ministry official in charge of Rafale had been taken off the 75 percent state-funded program after it ran into a euro1.5 billion (US$1.8 billion) budget shortfall for 2004-2005. The ministry did not immediately return calls seeking comment on the report.

The funding problems come as Dassault is competing with Boeing Co.’s F-15 and the Eurofighter consortium’s Typhoon in bidding for a deal to supply 20 fighter jets to Singapore. Dassault is concerned that its chances of clinching this and other export deals could suffer if the government seeks to cure its budget headache by pushing back the schedule for production of the 294 planes it wants to buy for French forces.

“It’s clear that a new delay in either acquisitions or future development could be very harmful to exports,” David said. “These are factors that the state must take into consideration.” Greece and Saudi Arabia are among other countries reported to be looking closely at the Rafale, which is already in service with the French Navy. The French government and Dassault are keen to see the Rafale gain a foothold in global defense markets ahead of the arrival of the US$200 billion F-35 Joint Strike Fighter. Currently in development by an international consortium led by U.S. defense giant Lockheed Martin Corp., the Joint Strike Fighter is not expected to become operational until 2007 at the earliest.

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