July 21, 2009
U.K. gives naval shipbuilder BVT a 15-year deal
A fifteen year contract that will help sustain the U.K.'s shipbuilding and support industry has been signed between the Ministry of Defence (MOD) and BVT Surface Fleet Ltd. (BVT) Minister for Defence Equipment and Support, Quentin Davies, announced today.
According to a MOD press release, this "Terms of Business Agreement" provides a guarantee that BVT will receive a minimum level of MOD work over the next 15 years, worth around GBP 230 million each year in order to sustain key skills. The long term agreement is designed to help secure key maritime industry skills in the U.K., after the Queen Elizabeth Class Aircraft Carriers have been completed later in the next decade and will also save the MOD hundreds of millions of pounds.
Minister for Defence Equipment and Support, Quentin Davies, said:
"This agreement will help BVT to build a world-class, sustainable business, balancing the supply of its services to future MOD demand while the long term view of our minimum requirements will also help the company to plan its development of other markets such as exports. The guarantee of fifteen years' worth of work is especially pleasing to announce in the current economic climate.
"We have invested heavily in modernizing the Royal Navy and currently have substantial contracts for the two Queen Elizabeth Class aircraft carriers and six Type 45 destroyers with BVT. The contract we have announced today will help industry preserve a valuable skills base as the sector restructures to meet our future needs and will lead to significant financial benefits for the MOD and the Royal Navy."
In return, BVT has committed to the transformation of the sector into a sustainable entity for the future. This will generate a minimum of GBP 350 million of financial benefits, with an aim to double this figure, over the duration of the contract.
BVT Chief Executive, Alan Johnston, said:
"Completion of the TOBA and the partnership that it creates between BVT and the MOD is a hugely significant event for the U.K. maritime sector.
"It will ensure that we can affordably deliver key capability to the Royal Navy in this country for many years to come, strengthen our competitiveness in the international market and deliver security to the shipyards that has not been known for decades."