Denmark’s F-35 programme faces DKK 14bn cost gap

The total cost of Denmark’s F-35 acquisition programme is expected to be billions of kroner higher than previously stated by the Ministry of Defence, potentially affecting funding available for other procurement programmes.

That is the conclusion of a new report by the Danish Auditor General’s Office (Rigsrevisionen), presented to the Auditors of Public Accounts (Statsrevisorerne).

"The Ministry of Defence has not had a comprehensive overview of the total costs of the F-35 programme," Rigsrevisionen concluded.

Over a ten-year period, the ministry "significantly underestimated" total programme costs by approximately DKK 14 billion at 2017 prices. Rigsrevisionen also found that information provided to Parliament during the acquisition process did not ensure transparency regarding the programme’s full expenditure.

The additional DKK 14 billion in costs is spread over the F-35 fleet’s approximately 30-year service life, equivalent to around DKK 500 million per year. The increase is largely attributable to the aircraft’s higher-than-expected operating costs.

"The consequence is that, all else being equal, fewer funds will be available than anticipated for other areas of the Danish Armed Forces," the auditors wrote.

Rigsrevisionen further noted that it is essential for the Ministry of Defence to maintain an accurate overview of total F-35 programme costs.

"The Ministry is receiving significantly more funding in these years, but total F-35 costs still account for a substantial share of its overall equipment budget," it stated.

"If F-35 costs prove to be significantly higher than expected, this could affect the extent to which the Danish Armed Forces can operate the aircraft as planned and could also constrain the acquisition and operation of other equipment."

The Auditors of Public Accounts oversee whether public funds are spent in accordance with Parliament’s decisions and whether those funds are managed efficiently. Its members are appointed by the Danish Parliament.