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Swiss Parliament Votes to Freeze Gripen Deal on Cost Concern

April 9 (Bloomberg) -- Swiss lawmakers voted to suspend the purchase of 22 Saab AB Gripen NG warplanes, questioning the deal’s cost and asking the government for further information.

“We are putting the Gripen deal on hold until some important questions are answered,” Green Liberal lawmaker Beat Flach said on Twitter after the vote by the Swiss Parliament’s Defense Committee. The Defense Ministry confirmed the outcome.

Switzerland plans to spend 3.1 billion Swiss francs ($3.3 billion) on the Saab planes to replace aging Northrop Grumman Corp. F-5 Tigers. Today’s vote marks a second parliamentary setback after the upper house last month voted against funding.

The combat-jet purchase is controversial because it requires spending cuts in other areas, since a balanced budget is enshrined in Switzerland’s constitution. The Gripen deal may also face a national referendum.

“This is part of the democratic process,” Richard Smith, director of the Swiss program for Stockholm-based Saab, said by phone. “Lawmakers have questions which we are ready to answer. I don’t believe there are any doubts about Gripen per se.”

The Swiss and Swedish governments have agreed to jointly work on the larger next generation Gripen NG. Sweden plans to field 60 of the jets, with deliveries to start in 2018.

European Aeronautic, Defence & Space Co. has written to the Swiss parliament offering to supply pre-owned Eurofighter Typhoons for 1.5 billion francs, the Blick newspaper said today, without saying where it got the information. Dassault Aviation SA of France made similar overtures in January, according to Sonntagszeitung. Both companies lost out in the initial bidding.

As the Swiss political process plays out, Saab will continue looking for local industrial partners to help produce Gripens, Smith said. The company has committed to build a major portion of the jet, including the rear fuselage, in Switzerland.

To contact the reporters on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net; Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Craig Stirling at cstirling1@bloomberg.net

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