Cost impact of cancellation

3.19  A total of £3.4 billion24 was spent on the Nimrod maritime patrol aircraft programme on the assessment, demonstration and manufacture phases up to the 31 March 2011. When the Department decided to cancel Nimrod, around 95 per cent of forecast spend for completing the nine aircraft had been used, leaving around £200 million to spend. The Department has confirmed that there will be some termination costs. These are currently under negotiation with BAE Systems and therefore cannot yet be published for commercial reasons.

3.20  The Department estimates that £1.9 billion of costs will be avoided over the next ten years by not bringing the aircraft into service. These are the costs associated with running and supporting the Nimrod maritime patrol aircraft up to 2020.




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24  This and all subsequent figures relating to Nimrod includes cost of capital.