LONDON (Thomson Financial) - The British government said it has signed
long-awaited contracts to build two new aircraft carriers for the Royal Navy
worth around 3 billion pounds.
The Ministry of Defence (MoD) said it had signed the deals with BVT Surface
Fleet -- the joint venture formed on July 1 by BAE Systems and VT Group -- and
the Aircraft Carrier Alliance (ACA).
The JV will be part of ACA, which also comprises Babcock, Thales UK, BAE
Systems Submarine Solutions at Barrow and BAE Systems Integrated System
Technologies (Insyte).
The MoD said construction work on the ships, to be named HMS Queen Elizabeth
and HMS Prince of Wales, will begin later this year and will create or safeguard
around 10,000 UK jobs at the peak of production.
The vessels will enter service in 2014 and 2016 respectively and are
expected to remain in the fleet for at least 30 years.
Government indecision over which projects to include in its latest defence
budget settlement delayed the signing of the deal, which will result in the
combination of most of BAE and VT's shipbuilding activities.
There had been fears that funding for the carriers would be cut, although
industry sources say other defence projects are now more likely to be hit.
Contracts signed Thursday include work worth 1.325 billion pounds to build
giant sections of both ships by BVT at Govan in Scotland and Portsmouth on the
south coast.
They also comprise 300 million pounds for the construction of giant sections
at BAE's yard at Barrow-in-Furness, 675 million pounds for the bow section and
final assembly and completion of the ships by Babcock Marine, with assembly at
Rosyth, 425 million pounds for design and engineering by Thales UK and 275
million pounds for design and supply of mission systems by BAE Insyte.
Defence Secretary Des Browne said: "This is a historic day for everyone in
defence.
"The two aircraft carriers will provide our forces with the world-class
capabilities they will need over the coming decades.
"They will support peace-keeping and conflict prevention, as well as our
strategic operational priorities.
"Today's contract signing seals the future for thousands of jobs and ensures
we will have a Royal Navy fit for the 21st century."
philip.waller@thomsonreuters.com
paw/slj
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