VT Halter awarded Egyptian contract

VT Halter in Pascagoula may have a second chance to assist the Egyptian navy in upgrading its ships from aging Russian- and Chinese-designed vessels to Western-, primarily United States, designed vessels.

The United States Navy has awarded the Pascagoula shipbuilder a contract for more than $165 million to begin acquiring materials for detail design of three fast missile ships for the Egyptian navy. The Egyptian navy is purchasing the ships through the U.S. Navy under the United States Foreign Military Sales Program. Under the program, the U.S. Navy contracts to have the ships built. Once the ships are built, Egypt will purchase them from the Navy.

In November 2005 Halter was given the $28.8 million Phase I contract for conceptual design of the ships. Although the agreement signed between the Navy and Halter to allow the company to acquire long lead time materials and transport them to Halter’s Pascagoula’s shipyards does not necessarily mean that Halter will receive the Phase II contract for the three ships, Boyd “Butch” King, CEO of VT Halter, said the contract is a good sign.

“We are now to the point where something very wrong would have to happen for us not to be awarded the Phase II contract,” King said. “We are looking forward to a long relationship with the Egyptian Navy.”

With the Phase I contract and the contract to acquire long lead time materials, Cynthia Borries, spokesman for Halter, said that Halter has received $194 million in contracts relating to the Egyptian ships. If Halter receives the Phase II contract, the value of the contract could grow to around $450 million.

According to a Navy press release, the long lead time materials contract will allow Halter to acquire all “hardware, software, licensing, design engineering, production engineering, manufacturing, test engineering, technical documentation, and program management through Factory Acceptance Testing and shipyard delivery of each respective system.”

In January 2001 the Egyptian navy contracted with Halter Marine to build four fast missile crafts to help upgrade its fleet. In 2001, according to the defence research firm AMI International, the Egyptian navy included four Russian-made Osa I-class ships made in the 1960s and 17 ships launched between 1979 and 1985. The 2001 contract with Halter called for the Pascagoula shipbuilder to build four Ambassador Mk III ships for Egypt for $406 million, with the first ship scheduled to be delivered in 2005. However, on April 19, 2001, Halter Marine declared bankruptcy, which resulted in the cancellation of the four contracts. VT Systems subsequently purchased Halter and brought the Pascagoula shipbuilder out of bankruptcy in 2002.