UK Starts Privatization Of Defence Procurement Arm - Newspaper
March 18 2012 - 9:22AM
Dow Jones News
The starting gun has been fired on a potential privatisation of
the Ministry of Defence's procurement arm as the government seeks
to rein in spending, the Sunday Times reports without citing
sources.
Philip Hammond, the defence secretary, has invited about 15
companies - including arms manufacturers, accountants and
outsourcers - to take part in a consultation that is expected to
lead to a radical shake-up, the paper says.
The Bristol-based organisation employs 20,000 people and has an
annual budget of GBP14 billion. It orders military kit, such as
fighter jets, armoured vehicles, weapons and satellite
communications, but has been accused of wasteful spending.
Hammond will canvas opinion over the next few months on three
options he is considering to restructure the Defence Equipment and
Support arm. The options being considered include selling the
procurement arm completely to a private owner, setting up a joint
venture to run the business with an outside partner or leaving it
as it is with minor changes to the way it is run, the paper
says.
It says Hammond has asked engineering outsourcers such as Serco
Group PLC (SRP.LN) and Babcock International Group (BAB.LN), as
well as Deloitte and KPMG, U.S. Bechtel Group and Fluor Corp.
(FLR), the American project management giants, and BAE Systems PLC
(BAESY) to take part in the consultation.
The government hopes to start the bid process to find a partner
in the summer, and to have a preferred bidder in place by the
autumn, it adds.
A spokesman for the British Ministry of Defence couldn't be
immediately reached for comment.
Newspaper Web site: http://www.timesonline.co.uk
-London Bureau, Dow Jones Newswires; +44 (0)20 7842 9320
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