Qinetiq joint venture wins £16bn MoD training deal

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The Government was accused yesterday of awarding a £16bn defence contract to a consortium led by Qinetiq in order to provide a jobs boost to South Wales before local elections in May.

The Metrix consortium, a joint venture between Qinetiq and Land Securities Trillium, was selected for the 25-year armed services training programme in preference to a group led by BAE Systems and the shipbuilding and support services group VT.

The contract, to provide all non-military training to army, navy and airforce personnel, will mean the creation of 4,000 jobs in St Athan in the Vale of Glamorgan where Metrix plans to build a training academy. The rival BAE/VT consortium had planned to base its training at RAF Cosford in the West Midlands.

Opposition MPs accused defence ministers of favouring the bid from Qinetiq, in which the Government still holds a 20 per cent stake, to boost Labour's chances in the Welsh Assembly elections. Bob Russell, the Liberal Democrat MP, said the decision was "bad news for every part of the UK apart from South Wales", while Robert Walter, the Conservative MP for Dorset North, said it was "wrong".

But Des Browne, the Defence Secretary, insisted that Metrix had only been selected after a "robust" assessment process and on the basis that it would best meet the training requirements of the three services.

The overhaul of the MoD's defence training arrangements will reduce the number of sites from 30 to 10, added Mr Browne. "Significant investment at all the major sites, including a largely new facility which will be built at St Athan, will ensure the best possible living and learn- ing environment for our service personnel," he said.

The Defence Training Review, as it is known, is split into two equal packages and represents the biggest single contract yet awarded under the Government's public finance initiative (PFI).

Metrix has been named preferred bidder for the first package of work, worth about £10bn, and provisional preferred bidder for the second. Metrix said it would take about 12-18 months to finalise the contracts. Other members of the consortium include Raytheon, AgustaWestland, EDS and Serco.

The previous biggest PFI deal by the MoD was a £13bn contract awarded to the Air Tanker consortium to meet the RAF's air-to-air refuelling needs for the next 30 years.

The consortium, led by EADS, will use a fleet of Airbus A330 aircraft. But two years after Air Tanker was named preferred bidder, a final contract is still be to signed.