Defence industry gets a pounds 1.5bn lift

(First Edition)

BRITAIN'S defence industry received a pounds 1.5bn boost yesterday as the Government announced a series of major equipment contracts, headed by an pounds 800m order for more Challenger 2 tanks from Vickers.

Despite cuts in its budget, the Ministry of Defence also gave the go-ahead for a batch of EH101 support helicopters from Westland and invited shipyards to tender for a Royal Navy minehunter order potentially worth pounds 350m.

The Challenger 2 order for 259 main battle tanks will lift Vickers and help secure jobs at its plants in Newcastle-upon-Tyne and Leeds.

Sir Colin Chandler, Vickers' chief executive, said the new order was a clear endorsement of the Government's decision in 1991 to buy Challenger 2 against stiff foreign competition. The MoD was also influenced by the significant cost-savings offered by Vickers on the second batch of Challengers. The first order for 127 tanks was valued at pounds 520m.

The announcement that the Royal Navy is to issue an invitation to tender for up to seven Sandown class minehunters was greeted with delight by the warship-building industry.

Martin Jay, managing director of Vosper Thorneycroft, the Southampton-based yard that supplied the Navy's first five Sandown class minehunters, said: 'We are delighted the Government is proceeding with this tender.'

The announcement of the helicopter order met with a mixed reaction at Westland, however, since it has to share the contract with Chinook. It had hoped to secure a firm contract for 25 of the aircraft.