The UK awards a £1.6bn Royal Navy contract to a Spanish-led consortium

The UK government has awarded a £1.6 billion contract to a consortium that includes a Spanish state-owned shipyard.

Wednesday’s decision sparked an angry backlash from unions and Labor, who have pledged to build the ships entirely in Britain. John Healey, the shadow defense secretary, called it a “betrayal of British jobs and British business”.

The vessels will be built by a consortium led by Spanish company Navantia, which also includes UK firm Harland & Woolf and naval architect BMT, who have been named as the preferred bidders for the contract.

It ousted Team UK, which included established military shipbuilders BAE Systems and Babcock International. Two other consortia were shortlisted.

The 40,000-ton fleet solid support vessels will provide equipment, ammunition and food for the Navy’s aircraft carriers, destroyers and frigates.

The ships will be built in blocks at the H&W factories in Belfast and Appledore in Devon and at the Navantia shipyard in Puerto Real in Cadiz, south-west Spain. Final assembly of all three ships will take place at H&W’s historic shipyard in Belfast, where Titanic was built.

The Ministry of Defense said the deal would create 1,200 jobs in UK shipyards and about 800 jobs across the supply chain. The consortium has committed to invest £77m in UK shipyards as part of the project.

Defense Secretary Ben Wallace said the selection of the consortium as the preferred bidder was a “welcome boost for the UK shipbuilding industry”.

He added that the government was “boosting the technology transfer and key competencies of a world-renowned shipbuilder, which are vital to the modernization of UK shipyards”.

John Wood, Chief Executive of H&W Group, insisted the contract would “bolster Britain’s design sovereignty and shipbuilding expertise and generate around £1.4 billion of national social and economic value”.

He downplayed the union’s fears that work would migrate to Spain, saying the contract had a “minimum 60 per cent UK stake”.

Partnering with Navantia, he added, would allow the consortium to “deliver the ships on time and on budget, something UK shipbuilding has never managed to do”.

It was only in April that Navantia established its UK subsidiary, which is the official prime contractor of the winning consortium. The company is owned by the Spanish state through Sepi, a state holding company that controls 100 percent of its capital.

Navantia has emphasized its ability to equip ships with new technology such as 5G equipment, hydrogen fuel and “digital twins”, sophisticated computer models that make operations and maintenance easier.

Gavin Robinson, MP for Belfast East for the Democratic Unionist Party, called the decision “fantastic news for Belfast and Northern Ireland as a whole”.

Steve Aiken, MP for the Ulster Unionist Party and a former Royal Navy submariner, said the contract was “a very visible way to get shipbuilding back at the Belfast shipyard” and a great opportunity for jobs and skills. Northern Ireland is one of the UK’s most disadvantaged regions biggest skills gap.

The protracted competition was contentious from the start, with the Department of Defense flipping the classification of the ships, which were not initially designated as warships, although they will carry defensive armaments.

The GMB union said they wanted assurances on the amount of work that would be done in the UK.

Production of the ships is due to begin in 2025 and all three support ships are expected to be operational by 2032, the government said.

https://www.ft.com/content/38d76fc2-9159-4b9d-ae4b-95f77562370d The UK awards a £1.6bn Royal Navy contract to a Spanish-led consortium

Adam Bradshaw

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