Turbulence for BAE as rival pours scorn on £13bn tanker

Companies are less than two weeks from submitting bids to supply the RAF with the aircraft under the Private Finance Initiative to replace its ageing fleet of VC10 and Tristar tankers. The project is the largest-ever Ministry of Defence PFI project, overtaking the closely contested £10bn contract to build two Royal Navy aircraft carriers.

AirTanker, a consortium com- prising EADS, Thales, Rolls-Royce and Cobham, claims the BAE-fronted proposal would represent a step back in performance for the RAF.

Robin Southwell, chief executive of AirTanker, said: "It is inferior equipment when compared to the Tristar. Compared to the VC10 it just about holds its own. The Government has a clear choice: it can either enhance its capability or decrease its capability."

Serco is also bidding alongside BAE and Boeing, in a consortium named TTSC. Air- Tanker and TTSC will submit their final bids to the Ministry of Defence on 30 April.

AirTanker's submission, which will run to 10,000 pages, will include an analysis of how much fuel each aircraft can carry. Seen by The Independent on Sunday, AirTanker will claim that TTSC's tanker will have a smaller capacity than the existing Tristar and only a marginally bigger capacity than the VC10.

AirTanker's bid is based on the Airbus A330. TTSC's bid involves modifying second- hand Boeing 767 aircraft to be bought from British Airways.

Mr Southwell said: "AirTanker's proposal is a very low- risk solution because we don't have to tamper with the wing design. Our competitor's proposal is high risk."

Mr Southwell's comments represent the first salvo to be fired in what is expected to be a fierce struggle for the contract.

Keith Archer-Jones, bid director at TTSC, rejected AirTanker's claims. He said that TTSC would operate a larger feet "which will provide more operational flexibility". He also claimed that the Airbus was too large to fit in some military hangars – for example, in the Falkland Islands.

Mr Archer-Jones also pointed out that the Italian government had recently signed up for a new 767 tanker fleet. "This will be delivered two and a half years before ours. Therefore, much of the risk will not be borne by the British Government."