I'll spell it out for you:
In the best case, PN gets the ship as a
GRANT and only pays for costs involved in the transfer of the ship being granted i.e. refurbishment at a US yard, initial crew training and, finally
multi-year support for the vessel (which is a service, that includes parts, documentation, advice, technical assistence etc). This means that if you're planning to use this ship 10 years and there is no ship purchase cost, it's at most $7.8 million per year to the US to support her continued operation. Which isn't a whole lot. Of course, normal operating costs (fuel, personnel, food, maintenance etc.) are born by PN as well.
Worst case: even if the ship McInerney itself was sold to PN rather than given away, then that $78 million actually includes many other things besides just the ship. Therefor, the actual selling price of the ship would be significantly less than the total of $78 million. The implication is furthermore that the annual cost of multiyear support would also be significantly lower than I initially calculated for a 10 year period.
Now, by comparison,
Turkey in 2002 got 2 Perry's with associated equipment and services for $110 million. That's $55 million a pop. If you take that 2002 price AND use 2% inflation then by 2010 the value of the contract would be something like $65,5 million. Next, factor in the devaluation of the dollar during this period and allow for some differences in the deals with Turkey and with Pakistan. If you consider all this, then I don't think $78 million is much different from what Turkey paid for theirs.
Next, another comparison: Three much more modern used Type 23 frigates were sold by UK to Chile. HMS Norfolk (1990), Grafton (1997), and Marlborough (1991) went for an apparent price of almost £45m or about $72 million each. The $242 million sales agreement covered the purchase of the three frigates, HMS Norfolk, HMS Marlborough and HMS Grafton, the pre-sale sanitization and maintenance, and a package of operator and maintainer training. BAE Systems Customer Solutions & Support and Fleet Support Ltd. would together effect the transfer. (The ships entered Chilean service in the period 2006-2008, so do factor in 2-4 years of inflation and the credit crisis to arrive at today's selling price.)
Read more:
Abstracts: Chile, U.K. complete Type 23 frigate purchase, refit deal. Chile signs UK Type 23 frigate deal. First Romanian frigate arrives home - Military and naval science
Read more:
Abstracts: Chile, U.K. complete Type 23 frigate purchase, refit deal. Chile signs UK Type 23 frigate deal. First Romanian frigate arrives home - Military and naval science
Scant return on navy's £1.2bn frigate sale | UK news | The Guardian
Abstracts: Chile, U.K. complete Type 23 frigate purchase, refit deal. Chile signs UK Type 23 frigate deal. First Romanian frigate arrives home - Military and naval science
Subsequently, in 2008, Chili sold it 2 reallly old (first commissioned 1973-4) ex-UK Leanders to Ecuador for $24 million for the pair. It is likely Chile is not providing refit and support for these ships.
http://www.****************/forums/navy-maritime/equator-buys-condell-lynch-frigates-chile-7508/
Chilean Navy - Wikipedia, the free encyclopedia
Considering Type 23s are much newer and Leanders are much older, the ship purchase price of a used Perry - exclusive of refit and support - should therefor fall somewhere in the range of $13-73 million. The $65.5 million calculated earlier on the basis of what it cost Turkey to get one plus inflation would sound about right.
As regards the difference between loans and grants:
"Recipient countries view loans as different from grants because they [loans, that is] carry the burden of future repayment. This induces policymakers to use funds wisely and to mobilize taxes or, at least, to maintain current levels of revenue collection. In contrast, grants are viewed as free resources and could therefore substitute for domestic revenues."
http://www.imf.org/external/pubs/ft/fandd/2004/09/pdf/clements.pdf
As regards US military aid or assistance:
"Several U.S. programs that provide foreign states with military and related assistance, directly and indirectly supporting U.S. arms transfers.
Foreign Military Financing: Foreign Military Financing refers to congressionally appropriated grants given to foreign governments to finance the purchase of American-made weapons, services and training."
Foreign Military Assistance
"The Foreign Military Financing (FMF) program provides
grants and loans to help countries purchase weapons and defense equipment produced in the United States as well as acquiring defense services and military training. FMF funds purchases are made through the Foreign Military Sales (FMS) program, which manages government-to-government sales. On a much less frequent basis, FMF also funds purchases made through the Direct Commercial Sales (DCS) program, which oversees sales between foreign governments and private U.S. companies. FMF does not provide cash grants to other countries; it generally pays for sales of specific goods or services through FMS or DCS.
FMF exists primarily to fund arms transfers, as military training is normally granted through the International Military Education and Training (IMET) program. However, FMF does support a good deal of training."
United States Foreign Military Financing - Wikipedia, the free encyclopedia
See also:
http://www.dsca.mil/DSCA_memoranda/fmf_dcc_2001/2001_guidelines.pdf
