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article imageAustria to sue Airbus over Eurofighter deal

By Nina LAMPARSKI and Philippe SCHWAB (AFP)     Feb 16, 2017 in Business

Austria said Thursday that it will sue European aerospace giant Airbus over a $2-billion sale of Eurofighter jets that has long been plagued by allegations of kickbacks.

A government probe concluded that the Airbus and Eurofigher consortium had "deliberately misled the Austrian Republic on the real price, delivery capabilities and its equipment" of the deal signed in 2003.

"Austria would have never decided to buy the Eurofighter jets in 2003 without the fraudulent deception by Airbus and Eurofighter," Defence Minister Hans Peter Doskozil said.

EU member Austria is seeking damages of up to 1.1 billion euros ($1.16 million) for its largest-ever defence deal, worth around 2 billion euros ($2.1 billion).

According to the "Task Force Eurojet" report presented in Vienna, Eurofighter knew that it would not be able to meet the delivery deadline of the 15 planes.

The five-year-investigation also found that Austria had been overcharged for costs that allegedly included backhanders.

"The two companies never informed Austria that the 2-billion-euro deal would include 183.4 million euros of legal but also criminal fees," Doskozil told reporters.

Ahead of the report's release, Airbus said in a statement sent to AFP that it was not aware of the Austrian findings and had received "no details" regarding the lawsuit.

However it said that Airbus has been "cooperating with the authorities in recent years, for example through its own enquiries".

In late January, Airbus had already agreed to pay tens of millions of euros in additional taxes over an allegedly shady 90-million-euro payment linked to the Austrian Eurofighter contract.

- Public unease -

Austrian and German authorities launched the current corruption probe into Airbus, then called EADS, to investigate whether officials had been paid millions of euros through advisory firms to secure the contract.

Prosecutors in Munich are set to publish their preliminary findings later this year.

The Eurofighter deal was first announced in 2000 by Austria's then conservative-run government despite fierce opposition from its far-right coalition partner and the Social Democrats.

The government had initially ordered 24 jets but later dropped the number to 18 and then to 15 because of budgetary constraints.

The purchase of the military fighter jets also stirred public unease in non-NATO neutral Austria.

Shortly after the contract was signed, allegations started to circulate that politicians and others involved in the deal were receiving kickbacks.

A probe was set up in 2007 to look into possible bribes, but came to no firm conclusion.

- Prestige project -

The Eurofighter Typhoon is a major prestige product for the European defence industry. The first prototypes were made in 1989.

The four founding nations in the consortium -- Germany, Spain, Britain and Italy -– all use the aircraft in their own air forces.

Austria saw the first sale outside of the four consortium members, and since July 2007 the 15 Austrian jets have clocked up more than 5,000 flying hours, according to the consortium.

In 2006 Saudi Arabia agreed to purchase 72 Eurofighter Typhoons. Other contracts have been signed with Oman and Kuwait.

As well as Airbus Defence and Space, representing Germany and Spain, the consortium includes British group BAE Systems and Italian firm Leonardo.

Eurofighters were used in combat missions in Libya in 2011.

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