Guest guest Posted December 11, 2008 Report Share Posted December 11, 2008 http://www.timesonline.co.uk/tol/news/uk/article5324649.ece From Times Online December 11, 2008 MoD halts production of aircraft carriers in new blow for Royal Navy The Royal Navy's most prestigious project, the construction of two 65,000-tonne aircraft carriers, is set to be the biggest victim of a Ministry of Defence cost-cutting exercise aimed at saving £2 billion over the next few years. The programme had already been delayed by two years, and now Hutton, the Defence Secretary, has announced a further postponement of up to two years. The commitment to build two large aircraft carriers as the centrepiece of the Government's new-style expeditionary strategy was first announced in 1998. The £3.9 billion bill for the two carriers, the biggest warships ever to be built for the Royal Navy, however, has caused a major headache for the MoD at a time when its budget has been squeezed. Despite a current real-terms 1.5 per cent increase in defence spending, the budget was simply not large enough to pay for all the huge equipment procurement programmes in the pipeline. In a written ministerial statement, Mr Hutton said that the in- service date would be delayed by one to two years. Construction had been due to start next April. It seems Mr Hutton has decided to delay the building of the carriers instead of axing other key projects, such as the so-called Future Lynx helicopter which was under threat. Mr Hutton confirmed that the Future Lynx helicopter to be built by AgustaWestland, based at Yeovil in Somerset would go ahead. This is potentially worth £1 billion to the company and the programme will save 500 jobs of people who are already working on the project. The original contract, announced in 2006, was for 70 Lynxes, 40 for the Army and 30 for the Royal Navy. Mr Hutton said the Future Lynx would come into service as planned in 2014. He also announced a £70 million upgrade programme for 12 existing Lynx Mark 9 helicopters, fitting them with new engines, to provide greater capability for operating in the heat of Afghanistan. The continuation of the carrier programme, albeit delayed, is also key to saving jobs. About 10,000 jobs are at stake spread around the country, and Mr Hutton is likely to emphasise that they will be safeguarded despite the delay in the programme. The carriers are to be built in four different shipyards – Barrow-in-Furness, Portsmouth, Govan in Glasgow and Rosyth in Fife – and assembled in blocks. The principle companies involved are BVT Surface Fleet, a joint venture combining BAE Systems and the VT Group, Thales UK, Babcock Marine and Rolls-Royce. Mr Hutton did not highlight the decision to delay the carriers in his statement but focused on the need to bring the in-service date of the warships more in line with the expected delivery of the Joint Combat Aircraft, the F35, which has been designed by American and British firms for the carrier role. The F35 aircraft programme has suffered delays and the aircraft were not going to be ready for the previous in-service deadline of 2014 for the first carrier, HMS Queen , or even possibly for the second, HMS Prince of Wales, in 2016. In addition to the £3.9 billion bill for the two carriers, the planned order for 250 F35s will add another £10 billion-£12 billion to the whole programme. Although the money has been included in the MoD's long-term costings, such expense was deemed to be unrealistic at a time when ministers were struggling to keep within the budget settlement agreed with the Treasury. The delay in the carrier programme is a blow to the Royal Navy which was originally promised an in-service date of 2012 for the first ship and 2014 for the second. The price estimate in the early years of the project was also set at £2.9 billion. Industry told ministers that it was impossible to build two 65,000-tonne ships at that price, and there were concerns that the Government would be forced to scale down the carriers. Following detailed negotiations, however, the MoD stuck to the 65,000- tonne concept because the Royal Navy insisted it needed a platform to take 36 aircraft, and the price duly rose to £3.9 billion. The in- service date also slipped to 2014 and 2016. The decision to push back the carriers once again will be seen as a considerable reversal for the Government which is on record as saying that it would stick to the 2014-2016 timeline. The announcement by Mr Hutton followed an internal review of all equipment which has been going on for several months. The MoD team involved went to Afghanistan to make sure that whatever cuts or delays it might recommend to ministers did not impinge in any way on the requirements for the frontline troops fighting the Taleban in Helmand province. The cost of the war in Afghanistan, however, is mainly paid for out of the Treasury's contingency reserves, although the MoD has to contribute towards some of the costs of the hundreds of armoured vehicles that have been sent to Helmand in the last 12 months. The Army's most important equipment project is the £16 billion Future Rapid Effect System (Fres), a new generation of armoured vehicles needed to replace the ageing Saxons, Scimitars, Spartans and other models that have been in service for decades. Mr Hutton also announced significant changes to this programme. The MoD announced in May the provisional selection of the Piranha V vehicle offered by General Dynamics, as the preferred design for the Fres utility vehicle, the replacement for Saxon. But negotiations with the company have failed to reach a satisfactory conclusion, and Mr Hutton said the General Dynamics offer was now going to be withdrawn. Instead, higher priority is to be given to upgrading the existing Warrior armoured infantry fighting vehicle, and the go ahead has been given for the Fres Scout vehicle, a replacement for the Scimitar and Spartan reconnaissance vehicles. This will mean that the Fres utility vehicle will be delayed. Mr Hutton said that the Fres programme was being restructured partly because £700 million had already been spent on buying 700 new armoured vehicles off the shelf to send to Afghanistan. Quote Link to comment Share on other sites More sharing options...
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