GEC's Yarrow wins pounds 600m Brunei job

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The Independent Online

GEC's Yarrow Shipbuilders, on Clydeside, has won a contract to build three patrol vessels for Brunei, thought to be worth about pounds 600m.

The company, struggling under a lack of orders, said the work would help to secure jobs, but was unlikely to stop the 400 redundancies announced in September. "It is a major contract," a spokesman said.

GEC is also awaiting news on a UK order for up to three Type 23 frigates, which may be announced next week. Both GEC and its competitor for the contract, the Solent-based Vosper Thornycroft, have warned about the implication for jobs if they lose the tender.

The Brunei order is for the design, construction, and integration of the weapons system, but several months' work has to carried out on the specifications before building work starts. Delivery of the first vessel is scheduled for the year 2000.

With so few defence contracts around, analysts say that unless GEC wins the forthcoming tender from the Ministry of Defence for frigates it will have to shed more jobs from its 2,500-strong workforce.

Vosper Thornycroft said more than 500 jobs will be lost if it loses the order to Yarrow. James Arbuthnot, Defence Procurement Minister, said: "I am delighted that the UK has won this important order, against strong world-wide competition."

Meanwhile, Mr Arbuthnot yesterday appeared to underline attempts by the Government to forge a new industrial defence strategy that would not just involve European collaboration.

"We are looking, from as early as possible in the life of projects, at every possibility for collaborative procurement not just with Europe but also with the USA," he said.

There had been some concern within parts of the Government that defence procurement was being done solely by links with Europe.

While projects such as Eurofighter and the concept of a European Armament Agency were important, Mr Arbuthnot said the Government could not ignore other parts of the world. "The UK defence industry has a strong foothold in the USA, and there are good opportunities to build on this."

He said the MoD was trying to improve its relationship with the Department of Trade and Industry. Both departments would work more closely in the evaluation of bids.