Scotland get bulk of navy carriers

Scotland will get the lion?s share of the Royal Navy?s new £4 billion aircraft carrier contracts in a decision that will determine the future shape of the British shipbuilding industry and will guarantee hundreds of Scottish jobs for more than a decade.

Defence industry sources said that a decision had been taken in principle for the ships to be built in five sections. Three out of the five go to Scotland, two to BAE Systems? yards on the Clyde, one to Babcock at Rosyth, and final assembly of the carriers will also be at Rosyth. The other sections go to BAE?s submarine works at Barrow-in-Furness and VT Group at Southampton

News of the contracts decision will be met with jubilation on the Forth and Clyde, which is already building up to eight Type 45 destroyers for the Royal Navy. The combined order book for T45s and carrier modules will take the yards well into the next decade.

The contracts for the large sections will account for around 80% of the total shipbuilding on the project, with the remainder ? mainly the construction of the ship?s deck ? to be put out to tender. This holds out the prospect of work for other British shipyards including Devonport and Swan Hunter on Tyneside. The sources said other yards apart from the main four were likely to receive subcontract work.

The allocation of the carrier work paves the way for the creation of “shipco”, a grouping that would combine all the four companies? naval ship construction assets in a single company. Talks aimed at establishing shipco have been held up by indecision over how the work on the carriers would be allocated. Despite the outline agreement on work share, sources close to the project say there are still wrangles over the project?s management. Earlier this year the Defence Procurement Agency (DPA) controversially appointed Kellog Brown & Root, a unit of the American defence and oil services contractor Halliburton, as the “physical integrator” on the carrier programme.

“We are making good progress on the shipbuilding programme and have made some sensible decisions. But there are still differences of opinion between the DPA, Ministry of Defence and the industry partners as to the structure of the alliance body that will run the programme,” said one source. The Ministry of Defence hopes to achieve “main gate”, the final sign-off and contract award, for the two ships in the first quarter of next year.

The decision on the allocation of shipbuilding work decreases the chances of French involvement in the construction of the British vessels. Defence ministers from both countries had signed an agreement of co-operation, although it is still possible that the French may use the British ship design for their planned new aircraft carrier.