Switzerland Risks Paying Billions If US Jets Are Delivered Late

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The delivery of F-35 fighter jets from the United States has already been delayed in some countries, and if this were the case for Switzerland, the Alpine country would have to pay up to CHF1.75 billion ($1.99 billion).

The Swiss parliament approved the purchase of new F-35 fighter jets from the US in 2022. Normally, if there is a delay in the delivery of the armaments, the manufacturer is bound to pay a contractual penalty, but in this case there is no such penalty, TamediaExternal link media group reported on Monday.  

The Federal Office for Defence Procurement (Armasuisse) wrote that the contract for the jets between Switzerland the US government “does not include any contractual penalties”. Therefore, while the Swiss state-owned defence contracting firm Ruag had to pay CHF726,000 for the delayed delivery of the Cobra mortar, Lockheed Martin, the F-35A’s manufacturer, does not risk the same.

According to Tamedia, it is Switzerland that would bear the costs of the delay. If the F-35s do not arrive on time, Switzerland would have to extend the lifespan of F/A-18 jets. A few years ago, the Swiss defence ministry estimated that between CHF800 million and CHF1.75 billion would be required to operate the F/A-18 until 2035.

Armasuisse also wrote that general agreements between the US government and the manufacturer – including the one for Swiss F-35A – would contain “contractual mechanisms” that “come into effect in the event of non-performance by Lockheed Martin”. However, neither Armasuisse nor Lockheed Martin says which mechanisms these are and whether they also provide for financial compensation.

The threat is impending, because Lockheed Martin seems to be struggling with delivery problems in the first few countries, including Poland. However, Lockheed Martin promised to meet the Swiss delivery dates.

“We expect the first Swiss jet to be ready for pilot training in the US in 2027,” it said in a statement. The first aircraft will be produced in Italy and they are expected to arrive in Switzerland in 2028.

However, the US Department of Defense hasn’t officially awarded the contract to Lockheed Martin: until it does so, production cannot start.  

Source : SWI