Will Brazil's Budget Cut Spell A Further F-X2 Delay?

The Brazilian defense minister, Nelson Jobim, says a decision to cut 2011 defense spending does not mean the long-running F-X2 fighter competition is delayed or scrapped.

The reason there is no direct linkage is that F-X2 spending would not hit the budget for a year or more even after a source selection is made, he says. In other words, even if the government picks either the Gripen, Rafale or Super Hornet (the three contenders), cash will not immediately change hands. In fact, Jobim expects contract negotiations to run about a year after a type selection is made, and serious financial obligations would come even later than that.

But read between the lines, and Jobim isn't ruling out an F-X2 delay either. He indicates that a decision on whether and how to proceed has yet to be made and that President Dilma Rousseff still has to hear from the national defense council on the issue. In fact, reports out of Brazil suggest that, at the very least, a delay in the F-X2 source selection process is in the cards.

The unanswered question, at this point, is whether F-X2 will merely be delayed or scrapped outright. Given the tainted process -- caused when previous Brazilian president Lula announced he favored the Rafale before the technical assessment was even complete -- there may be interest in Brasilia to start over. Again. But some industry officials warns that that could set Brazil back by years, since a new competition would take years to organize and play out.

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