The financial aspects of participation

Participating in the JSF programme costs money. But it is also a money-earner for a partner country. How are the contributions calculated?

The Netherlands has a dual role in the JSF programme:

  • as a partner: The Netherlands as a partner in the JSF programme> in the JSF programme, the Dutch Ministry of Defence is involved in the development, production and delivery of the JSF;
  • as a purchaser: The Netherlands as a purchaser of the JSF> of the JSF, the Dutch Ministry of Defence is a customer of the JSF programme.

This section discusses the financial aspects of the Dutch role as a partner in the programme.

Financial contributions from the partners in the JSF programme

The JPO places orders with aircraft manufacturers for developing and producing the JSF, and for setting up a global maintenance network. The cost is distributed over the partner countries, on a pro rata basis in accordance with their share of the programme.

The way in which costs are allocated among the partner countries depends on the number of aircraft each country has told the JPO that they are planning to order. Although these numbers are often referred to as the ‘order schedule’, this term is not entirely accurate. While most partner countries may be planning to order the JSF, there are no guarantees as to whether an order will indeed follow in practice. The fact is that some countries base the number of aircraft on future plans and not on the actual number of orders placed. All depends on the state of the decision-making process in each country, i.e. has it reached its conclusion or not?

The distribution of costs among partner countries depends on each country’s ‘planning number’
2007-2011 2012 2013-2014
Number % Number % Number %
US 2,443 76,993 2,443 77,803 2,443 78,730
UK 138 4,349 138 4,395 138 4,447
AUS 100 3,152 100 3,185 100 3,223
CAN 80 2,251 65 2,070 65 2,095
DEN 48 1,513 30 0,955 30 0,967
ITA 131 4,129 131 4,172 90 2,900
NLD 85 2,679 85 2,707 85 2,739
NOR 48 1,513 48 1,529 52 1,676
TUR 100 3,152 100 3,185 100 3,223
TOT 3,173 100 3,140 100 3,103 100
The distribution of costs among partner countries depends on each country’s ‘planning number’
2015/2017 2018
Number % Number %
US 2,443 79,967 2,456 80,130
UK 138 4,517 138 4,502
AUS 100 3,273 100 3,263
CAN 65 2,128 65 2,121
DEN 30 0,982 27 0,881
ITA 90 2,046 90 2,936
NLD 37 1,211 37 1,207
NOR 52 1,702 52 1,697
TUR 100 3,273 100 3,263
TOT 3,055 99,999 3,063 100

For example, the Netherlands revised the ‘planning number’ from 85 to 37 aircraft in the spring of 2014. This was based on a decision announced in a policy document entitled In the interests of the Netherlands and resulted in a decrease in the Dutch contribution towards the cost of the programme, and an increase in the share paid by the other countries. Canada, which has been a partner in the JSF programme since 2002 and which had been planning to order a large number of aircraft, decided in 2012 to reverse its decision on the replacement of its current fleet of aircraft. However, the Canadian government announced in 2018 that it was planning to raise its planning number to 85 in 2019 (this information has not been included in the above table). As a result, its contribution will rise while that of the other countries will fall.

The best way of explaining how it works is by comparing the planning numbers with shares: they determine both the size of each country’s annual contribution and the amount of royalties it receives. The figure is expressed as a percentage. If there is a change in the planning number for one country, the relative contributions from the other countries also change. Countries are entitled to change the planning number of aircraft from year to year. Any change in the planning number works only prospectively and not retrospectively: no extra payments or refunds are made if a country changes its planning number of aircraft.

We analysed the Dutch financial contributions to the JSF programme.

The financial processes relating to the JSF programme

In 2017 and 2018, we audited the financial processes relating to the JSF programme: Our aim was to ascertain whether the Netherlands was paying the right amounts of money for the JSF.

Income and other partner-country benefits

The JSF programme also generates income and other benefits for the partner countries: discounts on aircraft purchases, royalty payments from non-partner countries that buy the JSF, and remittances from domestic aerospace manufacturers. Finally, participation in the programme also generates knowledge and experience.