107. During our inquiry into the MoD Annual Report
and Accounts 2004-05 we examined the £147 million loss relating
to a building at AWE Aldermaston.
We examined the £205 million loss relating to Chinook Mk
3 helicopters in our Defence Procurement 2006 inquiry.
We therefore focussed on the two losses, totalling £310
million, relating to the MR and LR TRIGAT programmes. Details
on these two losses are set out in Note 31 to the Annual Report
- MR TRIGATconstructive
loss of £105.343 million arose from the UK Government decision
not to proceed into production for the medium range anti-tank
guided weapon system.
- LR TRIGATconstructive loss of £205
million arose from the UK Government decision not to proceed into
production for the long-range anti-tank guided weapon system.
108. The MoD reports that losses "also result
from sensible management decisions" such as the decision
to withdraw from the Medium Range TRIGAT project to procure a
more advanced solution more quickly at a lower through-life cost.
We sought further information on what the UK had gained from its
involvement in the early stages of these two equipment programmes,
and whether the UK would be entitled to any payment should these
weapon systems be sold to other countries in the future. The MoD
told us that:
Involvement in the early stages of the Long Range
and Medium Range TRI-national Guided Anti-Tank (TRIGAT) programmes
improved MoD's understanding of Guided Weapon performance modelling
and demonstrated the capabilities and limitations of relevant
technologies. Under the terms of the Memoranda of Understanding
and contracts, MoD is entitled to share with the participating
nations the Commercial Exploitation Levy which would accrue from
sales to 3rd parties.
resulting from the UK government's decision to withdraw from the
Medium Range and Long Range Anti-Tank Guided Weapon System programmes
total some £310 million. We accept that withdrawing from
equipment programmes to reflect changing requirements can be a
sensible management decision. We look to the MoD to ensure that
the knowledge gained from participation in these programmes is
utilised and that opportunities which may result in a return on
the investment from the sale of these two equipments are pursued.