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Total cost of watchkeeper is not just the birds. It's also assorted
sensors (expensive), ground control stations and probably 10 yrs of
spares and at least some contractor support, plus bits and pieces such
as initial training. Then there's mods, takeoff and landing on
something other than concrete or tarmac, changes to the flight control
s/w for different payloads, not to mention probably getting it safety
certified to UK standards (to enable flight outside military airspace in
UK), maybe even re-writing s/w to safety critical standards (the
precious citizenry of UK might get a tad agitated about 'unmanned war
machines' hitting their roofs). Then there's standardisation, NATO
seems to be getting excited about any nations' birds being controllable
and able to dump data to the ground stations of any nation, means
standardisation and new equipment that has to be integrated. It all
costs and has no shortage of engineering challenges. (particulary given
UK's totally woeful system engeering skills), a big contingency sounds
wise to me.
The reported loss of 70 birds in Iraq is probably not just Phoenix.
They've being buying mini-rpvs (ie hand held and launched by 2 bods +
bungy cord). No doubt some of these have become the worse for wear.
Phoenix has done a surprisingly good job considering it was designed
for NW Europe where there are no sandstorms and it doesn't get too hot.
They've also being flying them at ranges from their control stations
that were beyond what the book said was possible (perhaps the book was
sometimes right).