The three vehicle types shortlisted today by defence procurement minister Lord Drayson for the £16 billion FRES project have already been rejected by the Army. They were condemned as "lacking development potential".

Two of these, the Piranha (top left) and the VBCI (below right), were flagged up as possibles last year while the third, the Boxer (below left), is the result of a joint German, Dutch and British project, from which the British pulled out in order to pursue FRES, losing its stake money of £48 million into the bargain.

The Piranha – which, if successful, would be built under license by the US-owned General Dynamics – is a Swiss design dating from 1990. A variant is in use by the US Army as the Stryker, but is regarded only as an "interim solution" for the US equivalent of FRES (the Future Combat System) – a test bed for new ideas pending the development of its own new generation of armoured vehicles.

The third of the vehicles on the shortlist, the French-built (Renault) VBCI, stems from a French Army contract issued in November 2000, with first deliveries in 2008. If it entered British service by the earliest projected in-service date for FRES of 2012, it would be a 12 year-old design, with the origins of the concept stretching back into the 80s.

While this situation is bad enough, the Future Rapid Effects System (FRES) – for which these vehicles are being shortlisted – is no mere armoured vehicle replacement programme. Chief of the General Staff, General Sir Richard Dannatt puts it "at the heart of the future Army".

It is a project which will shape the future of the British Army and, to that extent, the future of this nation. As current campaigns in Iraq and Afghanistan amply demonstrate, the fighting capabilities of our Army on the ground have a massive influence on our national prestige and the perception we have of ourselves.

Many of the problems in those theatres – and with them the perception that British troops have been struggling – arise from the nature of the equipment provided. The bulk of it was designed to deal with a Warsaw Pact land invasion across the plains of northern Germany. It was augmented with some equipment developed to deal with civil unrest in Northern Ireland and, only recently, has the Army taken delivery of a small number of vehicles adapted to deal with the specific threats with which it has to deal.

Now, there is a once in a generation opportunity to re-equip a major part of the Army. This makes the FRES project so crucial, not just for the Army but for the nation as a whole. And the key question is what precisely the Army needs.

To be fair, in making that decision, military planners have a tough time. Given the snail-like progress of defence procurement, they must think ahead ten or twenty years, and the equipment they supply may well still be in service 50 years hence. By any measure, therefore, theirs is a difficult task, verging on the impossible. Whatever they decide, they are open to charges of getting it wrong.

That said, planners were and are able to work within a framework, the demarcations set by what has emerged as a series of graduations in military action. At the one end, there is what is known now as "high-end" warfare – the classic, conventional warfare involving all the paraphernalia of armies, from heavy tanks - known in the trade as Main Battle Tanks (MBTs) – through armed and armoured troop carriers known as Mechanised Infantry Combat Vehicles (MICVs) to heavy artillery and the rest.

At the other end of the spectrum is what is loosely termed peace-keeping, although this has developed various graduations of its own, the lowest level being post-conflict reconstruction, the latter stages of which differ little from civilian policing.

In between, however, is an amorphous, ill-defined role known as counter-insurgency which has some characteristics of high-end warfare and some which are more akin to post-conflict reconstruction. Perplexingly, troops often find themselves having to switch from one to the other, in an instant – and they must be equipped for both.

Alongside these graduations, however, there is another strategic imperative – air portability. Away from the comfort zone of northern Europe, it is now appreciated that the British Army may have to fight anywhere in the world and, given the pace of political developments, might have to do so at very short notice (not that this has ever been any different).

With the development and increasing availability of military heavy-lift aircraft, there has been the prospect of creating army equipment which is capable of engaging in high-end warfare yet is light enough to be air-transportable. From this has emerged the idea of rapid reaction forces, able to respond to crises at short notice, being transported anywhere in the world by a fleet of military aircraft, ready for action when they arrive.

It is this concept that gave rise to FRES – the Future Rapid Effects System – a range of medium weight armoured vehicles, choice of the first type of which Drayson has set in motion today with the nomination of the shortlist. Whatever else, this equipment is primarily intended for high-end warfighting.

Common to all three vehicles is that they are all lightly armoured eight-wheeled armoured personnel carriers. None are capable of withstanding hits from the ubiquitous RPGs without additional armour. With that armour, none are air portable in a standard C-130 transport, with difficulty in an A400M, if at all, and in only small numbers in the larger C-17s. The defining characteristic of FRES, therefore, has effectively been abandoned. The airlift capacity to move a realistic number of these vehicles, their supplies and support elements, will simply not be available.

This, however, is the least of the problems. As with the Challenger MBTs and Warrior MICVs which are currently engaged in Iraq, British Army equipment will most likely be expected to perform a multiplicity of roles. There is neither enough money nor manpower to maintain separate Armies for different tasks. Inevitably, therefore, in the course of its life, FRES will almost certainly be deployed on any counter-insurgency operations for which the Army is tasked. Here, the most intractable problem will arise.

Crucially, since all the vehicles on the shortlist are old designs, they were conceived before the experiences of Iraq and Afghanistan brought into play the high level of mine and blast protection manifest as the RG-31, the Cougar, Mastiff, Bushmaster and the Dingo II.

Although the Stryker version of the Piranha is deployed in Iraq by the US, as we recently pointed out, it has suffered a string of losses which suggest that the insurgents have learned how to deal with it, raising questions about the vulnerability of this vehicle. And what applies to the Stryker to a greater or lesser extent applies to both the VBCI and the Boxer. They may have a high degree of protection and some mine resistance, but none are designed specifically to deal with the threats they might meet in a counter-insurgency campaign.

Even if they were sufficiently armoured in themselves, the fact that they are warfighting machines renders their design less than optimal for counter-insurgency. This became apparent from another incident we reported, where two Canadian soldiers in Afghanistan, riding in a Bison APC, were killed by a suicide bomber.

The Light Armoured Vehicle (LAV) that they were riding is another variant of the Piranha and, as a "conventional" wheeled armoured vehicle, designed primarily for high-end warfare it has a fatal weakness. In common with most vehicles of the type, it is not designed to be operated in a fully closed down condition for long periods of time. Visibility is restricted and crew comfort (especially when it is hot) suffers. By any measure, this equipment is far from ideal for use as convoy escorts or for patrols, which are the routine fare of counter-insurgency operations.

Whichever way you cut it, therefore, the vehicles Drayson has shortlisted cannot be considered suitable for counter-insurgency operations. At best, they would have been marginally acceptable at the start of the campaign in Iraq but – as we reported above – the Army itself has decided that neither the Stryker nor any other off-the-shelf solution is a suitable platform. Evidence given was that the Army unanimously said that it did not want to go for one of those products.

If these were the only issues affecting Drayson's choice, they would be sufficient to indicate that he had made a very bad call. But there is even more. In addition to the FRES, the Army is keeping some of its heavy Challengers and Warriors, which will have to be upgraded if they are to continue in use.

With the retention of the Warriors, especially, there is now developing an anomalous situation. While FRES was supposed to be a "medium" option, increases in the amour applied to the vehicles means they are now equivalent in weight to the so-called "heavy", tracked Warriors. In effect, the project has come down to replacing tracks with wheels. And, while wheeled vehicles have advantages in some theatres, in high-end warfighting, in terms of cross-country performance, manoeuvrability and protection, there is no substitute for tracks.

Drawing various elements of this decision together, therefore, what Drayson is effectively doing is announcing a wheeled (partial) replacement for the Warrior - choosing a platform that the Army has already said it does not want – which in certain theatres will be less capable than the vehicle it is replacing and which will be entirely unsuitable for counter-insurgency operations. In many respects, a better and cheaper solution could be reached by upgrading Warriors and Challengers, and equipping them with much of the sophisticated communications and other equipment which is intended for FRES.

The killer fact, however, is that these new vehicles are so expensive that very little will be left in the Army's share of the procurement budget to upgrade the existing "high-end" fleet or to buy the next generation of vehicles that are being developed for counter-insurgency operations. Instead, the Army is getting a new fleet which is neither optimal for high-end warfare nor suitable for counter-insurgency operations, and will not even be capable of rapid deployment – which was the whole purpose of the FRES project in the first place. The new vehicles – whichever are chosen – will not be fit for purpose.

We are on the way, it seems to making another blunder of Eurofighter proportions, and it is no comfort at all that the Dannatt is so enthusiastic about a choice of vehicles that his experts have already rejected.

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