International Missile Program Faces Billion Dollar Cost Overrun

From Reuters: The $19 billion U.S.-European MEADS missile development program is facing about $1 billion in added costs, according to officials briefed on the program, but the overrun should not breach congressional thresholds that would trigger a live-or-die review.

Gregory Kee, general manager for the NATO agency that manages the Medium Extended Air Defense System acknowledged it would require additional funding to finish the development of the missile system designed to replace the aging Patriot system, but gave no exact figure. …

Canceling the program could cost up to $1 billion in termination fees. Such a move would probably also undercut U.S. relations with Germany and Italy, which are counting on MEADS to replace their own aging missile defense systems.

Under the trilateral program formally begun in 2004, the United States is responsible for 58 percent of the development costs, with Germany covering 25 percent and Italy, 17 percent. …

Germany and Italy are due to deploy MEADS in 2016, followed by the United States in 2018. Designed to intercept short-range and cruise missiles, and shoot down planes and drones, the MEADS system is mobile, unlike Patriot. Its radar also swivels 360 degrees to track targets from any direction.  (photo: MEADS International)

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