LONDON - COSWORTH will provide Formula One teams with a low-cost engine option from 2010, the sport's governing body said on Friday after Honda announced their withdrawal from the sport.

International Automobile Federation (FIA) President Max Mosley said the body was in exclusive negotiations with Cosworth, Xtrac and Ricardo Transmissions (XR) to provide a complete powertrain (engine and gearbox).

'The cost to each team taking up this option will be an up-front payment of 1.68 million pounds (S$3.71 million),' Mr Mosley wrote in a letter issued hours after Honda announced they were quitting for financial reasons.

The teams would then pay 5.49 million pounds per season, a fraction of the current price, for each of the three years of the supply contract from 2010-2012.

'This price is based on four teams signing up and includes full technical support at all races and official tests, plus 30,000 km of testing,' added Mr Mosley.

'The annual cost will reduce if more teams take up the option, for example to 4.99 million pounds per team with eight teams. It will further reduce if less than 30,000km of testing is required.'

With a nod to the major manufacturers, Mr Mosley said teams would have two other options if they wanted to continue building their own engines.

Existing engines
The first alternative was to make the engine themselves, to the same specification as the Cosworth one after being provided with the necessary information.

The second was to continue to use their existing engines, subject to the current ban on development and with a requirement for engine parity.

'Teams opting for one of the latter two options would nevertheless use the XR transmission,' said Mr Mosley.

The Briton, who has long warned that Formula One had become financially unsustainable with some teams spending well in excess of US$300 million a year, said the cost-cutting measures would help independent teams survive the global economic crisis.

They could also make it easier for Honda to be replaced on a grid that now runs to just 18 cars while avoiding any change to the show on offer.

Honda Motor Chief Executive Takeo Fukui told a news conference on Friday that a return to the sport could take time, and that there were no plans to continue as an engine supplier.

Mr Mosley said at least four teams had to enter into contracts to use the power train by close of business on Dec 11 for the arrangements to proceed.

'In the event of fewer than four teams signing up, the FIA may still proceed but the price on offer will vary,' he said.

The Formula One Teams Association (FOTA) said in a statement after a meeting on Thursday that they were also committed to savings, but gave a later date for the introduction of their proposed low-cost engine.

'The teams have agreed to further measures implementing substantial cost cutting for 2009 and 2010, and additional initiatives to improve the show,' they said.

'Furthermore it is unanimously agreed that a new low cost engine will be introduced in 2011.' -- REUTERS