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TO RUEHC/SECSTATE WASHDC IMMEDIATE 7848
INFO RUEHZG/NATO EU COLLECTIVE PRIORITY
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C O N F I D E N T I A L THE HAGUE 000063 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/UBI 
 
E.O. 12958: DECL: 01/12/2017 
TAGS: MARR PGOV PREL NL
SUBJECT: NETHERLANDS: DEFENSE BUDGET WOES -- PRICE FOR 
AFGHANISTAN? 
 
Classified By: CDA Chat Blkeman, r...



92463,1/12/2007 17:19,07THEHAGUE63,"Embassy The
Hague",CONFIDENTIAL,,"VZCZCXYZ0000
OO RUEHWEB
DE RUEHTC #0063/01 0121719
ZNY CCCCC ZZH
O 121719Z JAN 07
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7848
INFO RUEHZG/NATO EU COLLECTIVE PRIORITY
RUEKJCS/CJCS WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
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","C O N F I D E N T I A L THE HAGUE 000063
SIPDIS
SIPDIS
STATE FOR EUR/UBI
E.O. 12958: DECL: 01/12/2017
TAGS: MARR PGOV PREL NL
SUBJECT: NETHERLANDS: DEFENSE BUDGET WOES -- PRICE FOR
AFGHANISTAN?
Classified By: CDA Chat Blkeman, reasons 1.4 (b,d)
¶1. (C) Summary: The cost of the Dutch deployment in
Afghanistan and probems related to the Dutch Ministry of
Defense reoganization -- coupled with negotiations on
defene issues during coalition formation talks of the nw
Dutch government -- could jeopardize several key projects for
the 2007 defense budget. While ""al options are still on the
table,"" possible projct options include postponing or
withdrawing fro the NATO C-17 Strategic Airlift Initiative,
as ell as new Chinook helicopter, Tactical Tomahawk (TACTOM)
missile, and unmanned aerial vehicle (UAVs acquisition.
Defense Minister Henk Kamp and MODState Secretary Cees van
der Knaap will discuss ptions January 16. End summary.
¶2. (C) MOD conacts tell us the rising cost of the Dutch
deployment to Afghanistan -- already half a billion euros -
is severely restricting Dutch defense investmets. A number
of defense projects slated for 200 and 2008 are likely to be
cut or delayed as a rsult. In addition, an on-going defense
ministry reorganization is compounding the problem.
Previously, Dutch services jealously guarded their own
budgets. With the reorganization, the army, navy and air
force for the first time are working from a combined budget
-- oversight has been lax. As a result, project costs have
run higher than anticipated. MOD Director of General Policy
Affairs Lo Casteleijn told Charge January 12 that the GONL
often funds projects up to 130 percent in case of cost
overruns -- in this case, most 2006 projects are running at
about 120-130 percent, which is cutting into 2007 project
financing.
¶3. (C) MOD contacts stressed ""all options are still on the
table"" regarding defense-related projects. DM Kamp and MOD
State Secretary van der Knaap will discuss various options on
January 16, and shortly thereafter send a letter to
Parliament presenting the ""finalized"" budget. Kamp will then
appear before the parliamentary Defense Committee for further
discussion. Major projects include:
-- Joint Strike Fighter (JSF): The GONL initially expressed
interest in purchasing three early JSF aircraft in order to
participate in the test and evaluation phase. MOD contacts
suggest the Dutch will now purchase two -- which still
qualifies them for the test and evaluation program.
Casteleijn told Charge January 11 that JSF will be a topic of
coalition formation talks, especially as the Labor Party
(PvdA) opposes JSF program participation. Casteleijn said
the Christian Democrats (CDA) and PvdA need to ""define the
boundaries"" for discussion on JSF. He suggested program
participation will remain intact while the number of aircraft
purchased will become a topic of negotiation. Casteleijn
also expected PvdA to push for an independent, non-partisan
review of JSF to determine whether it is the ""best plane for
the best price.""
-- NATO C-17 Strategic Airlift Initiative: MOD and defense
consultant contacts note the price for ""leasing"" C-17s per
hour has nearly doubled from earlier estimates, while Boeing
insists participating NATO allies purchase planes in advance
to leasing them -- this may force the Dutch to withdraw from
the initiative. Casteleijn expressed disappointment over the
revised terms of reference, and confirmed that the Dutch
delegation at NATO has received instructions to push back --
if the initial terms are not possible, then the Dutch will
have to pull out. He said strategic airlift remains a
priority -- he would not be surprised if the number of JSF
aircraft acquired was reduced to support C-130 or C-17
acquisition.
-- CH-47 Chinook Helicopters: The Dutch are relying heavily
on their Chinooks in Afghanistan, and have requested six new
Chinooks with specialized -- and expensive -- Honeywell
cockpits in addition to refurbishing the rest of their
Chinook fleet. While postponing the new Chinook acquisition
is a possibility, MOD and defense consultant contacts say the
MOD leadership is ready to go ahead with the purchase.
Refurbishing the fleet will most likely be delayed.
-- Tactical Tomahawk (TACTOM) missiles: TACTOM was considered
a key part of DM Kamp's plan to improve the Dutch navy;
equipped with TACTOM, the relatively new Dutch LCF frigates
would become a force to be reckoned with. The Dutch MOD had
received parliamentary support to become the third country
after the United States and the UK to acquire TACTOM.
However, PvdA vociferously opposed TACTOM acquisition, while
the GONL was panned in the Dutch press for attempting to
acquire a weapon viewed as ""aggressive and offensive"" in
nature. MOD Deputy Director for General Policy Affairs Jan
Geerts Siccama told polmiloff January 5 that while DM Kamp
may continue to push TACTOM, he would not be surprised if the
almost USD 60 million acquisition becomes a casualty of
coalition formation talks with PvdA. Casteleijn agreed; he
believed TACTOM was ""dead"".
-- Unmanned Aerial Vehicles (UAVs): The Dutch have informally
walked away from their MALE UAV program with the French, and
expressed keen interest in the U.S. Predator B UAV program.
However, MOD working level and defense consultant contacts
suggest pursuit of Predator B will be suspended indefinitely
due to financial constraints. Casteleijn noted that UAV is
""still on the agenda,"" but funding it in 2007 will be
difficult given budget constraints.
Comment
-------
¶4. (C) The Dutch pride themselves on ""doing more"" with a
limited defense budget. While Dutch spending on defense as a
percentage of GDP is well below NATO's two percent target,
the Dutch have invested generously -- over 20 percent of its
defense budget -- on new defense-related projects in recent
years. The Dutch are now over-committed and looking to
prioritize ongoing operations and big ticket acquisitions
with smaller investments -- while keeping Afghanistan and JSF
at the top of the list. The Ambassador will engage further
with CHOD Gen. Berlijn and senior MOD leadership next week.
BLAKEMAN