A choice will be made later this year and will depend on the progress of the development programme for one of the systems.
Costs
9. Costs quoted in paragraph 4 are at 1977/78 prices. They should however be treated with caution. They do not include the military equipment fit (eg communications and weapons) and, in the case of the OSPREY represent only the designer's estimate.
10. The most up-to-date spread of expenditure available which we are using for our own financial planning purposes is as follows:
80/1 81/2 82/3
£M 1.4
83/4
84/5
TOTAL
6.8
9.1
3.5
0.1
20.9
These figures are at September 1978 price levels and the cost would be divided between HMG and the IIong Kong Government on the 25: 75 basis.
11. It may be helpful, in estimating any escalation of these costs, to look at the currently falling level of inflation:
1974/5 to 75/6 1975/6 to 76/7 1976/7 to 77/8 1977/8 to 78/9
22.9%
23.43
16.2%
10.1%
An average of the last 2 year's rates ie 13% over the programme year by year at least ought therefore to represent a "worst case".
12. In the course of the craft study MOD(Navy) also looked at the relationship between speed and cost to see whether it was possible to derive a mathematical relationship. Jo smooth progression was evident, largely because much depends on the engine type involved: for a given craft, a speed of 10-25 knots may be practical with one type of engine, but to achieve a slow cruise speed of under 10 knots an additional 'single drive' engine may be required, while a completely different engine may be needed for speeds great- e? than 25 knots. As a rough guide:
for a vessel of 230 tonnes, a speed of 30 kts and a cost of £3.2m every kt increase or decrease would represent a price variation of £0.12m.
In practice however there would be little price variation for speeds up to 25/27 kts whereas speeds in excess of 30/32 kts could as much as double the craft cost.
CONFIDENTIAL
No comments yet.
Private notes are available after approval.