£3bn deal for aircraft carriers put back a year

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The controversial £3bn project to build two aircraft carriers for the Royal Navy is to be delayed by up to a year, the Government has admitted.

The controversial £3bn project to build two aircraft carriers for the Royal Navy is to be delayed by up to a year, the Government has admitted.

Contracts with Britain's BAE Systems and France's Thales were due to be signed in April. But after nearly three months of wrangling, Lord Bach of Lutterworth, the minister for defence procurement, has revealed that the Government has decided to delay signing for up to a year.

"We are extending the assessment phase of the carriers in order to de-risk this critical and most important of all our projects," he said. "This is a brave thing to do because people expect results straight away, but we have to discipline ourselves. I would be disappointed if we weren't ready [to sign] within a year."

He insisted that the in-service dates for the two carriers remain unchanged at 2012 and 2015.

The news will anger BAE, which is still reeling at suggestions that it will be stripped of its lead role on the project. Britain's largest arms company has threatened on a number of occasions to pull out of the project after rowing with the Ministry of Defence.

The MoD is determined to press forward with a new way of buying equipment from private contractors, a reform introduced after it was severely criticised by the National Audit Office for cost overruns on some projects. Under the new system, most of the haggling and negotiations with private companies is done before contracts are signed.

One issue still to be addressed is the exact cost of the carriers. Privately, the contractors have told the MoD that the carriers will cost £4bn based on the technical specifications issued by the Royal Navy.

But Lord Bach said: "We are satisfied that we can build the carriers for £3bn. These will be the biggest warships ever built in the UK. That is not to say that we shouldn't be prepared to trade off [some things] in order that we get what we need at the right time and at the right cost."

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