LONDON – The first element of a major overhaul of Britain’s military air traffic management system has gone fully operational, but the Ministry of Defence has admitted the projected savings expected from the program are drastically reduced.

The Royal Air Force base at Shawbury, Shropshire, the home of British military helicopter flying training, is the first of more than 60 sites in the U.K. and abroad to begin using updated systems and support as part of a £1.5 billion transformation of air traffic management awarded to Aquila Air Traffic Management Services in 2014.

The introduction of cutting-edge technology as the result of what is known as the Marshall Programme will be a major step forward for Britain’s aging defense air traffic management capabilities, but it has come at a greater-than-expected cost. In other words, the savings achieved from the program during its 22-year life will amount to only one-third of the forecast at the time of contract signing.

At the time of the award to Aquila, an industry partnership of Thales UK and National Air Traffic Services, the MoD forecast savings of up to £1 billion, or $1.36 billion.

In the announcement Jan. 7, 2022, the MoD said savings would be no more than £317 million, or $432 million, over the course of the program.

“Programme Marshall will save hundreds of millions of pounds for the taxpayer as it continues to deliver for U.K. Armed Forces by providing cutting-edge air traffic management technology,” said a spokesman.

The MoD hasn’t given a reason for the savings discrepancy, but sources say several factors were behind a revision of the optimistic figures in late 2014.

These are thought to include an increase in the number of staff required to deliver the program and a government decision that value-added tax for contracted services needed to be applied on the deal.

The timing, such as meeting the initial operating capability, also has been an issue.

At the original program approval in 2014 the completion of the equipment installation was scheduled for March 2021.

Against a background of mounting program difficulties the schedule was reset in 2017-2018, to December 2024.

Full operating capability across more than 60 MoD sites remains on track for 2024.

Despite the savings and scheduling setbacks the MoD announcement appears to set the seal on a significant turnaround in the fortunes of a program which at one time was heavily criticized by the government’s powerful Infrastructure and Projects Authority as appearing to be “unachievable” due to the difficulties it was in.

By last year, the Authority, which reports to the Cabinet Office and the Treasury, said that it was “probable” the project would be successfully completed.

The new capability includes a £400 million ($545 million) investment in new surveillance radars and a wide range of equipment such as tower systems, new surveillance and navigation aids and radios.

The deal between Aquila and the MoD saw the industry partnership contracted to supply, maintain and install new and updated air traffic management equipment and train maintainers and operators over a 22-year period.

The program combines into a single deal what was previously more than 70 individual contracts in the defense air traffic management sector.

Aside from sites in the U.K. the British are installing the Marshall equipment at overseas bases as well, including Gibraltar, the Falklands and Cyprus.

Gibraltar is expected to be the first overseas location to benefit from Marshall. Supply of equipment to upgrade the Falkland Islands military air traffic management system is also en route. Two new systems for deployed operations are also included in the program.

Andrew Chuter is the United Kingdom correspondent for Defense News.

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