The Ministry of Defence has admitted that its £2.4bn Nimrod MRA.4 maritime reconnaissance aircraft project will overrun by two years.
Under the project, British Aerospace is updating and partly rebuilding old Nimrods to an advanced new standard.
In a Parliamentary answer, defence procurement minister John Spellar said: ‘When the contract was placed, British Aerospace undertook to meet an in-service date of April 2003. Resource and technical difficulties with the early phases mean BAe does not now expect the aircraft to enter service before early 2005.’
BAe is hoping it can cut this delay by six months through ‘aggressive management’. The company said: ‘We underestimated the management time we needed at the beginning, and had problems recruiting software engineers.’
The contract’s estimated cost of £2.4bn is based on economic conditions in September 1998. It represents a rise of 0.5% since it was placed in December 1996.