Rolls-Royce clinches £250m MoD tank order

Rolls-Royce, the aeroengine manufacturer, yesterday received a double boost as it announced that its Vickers unit had clinched a tank contract with the Ministry of Defence worth £250m, and also unveiled its own joint venture with five European aerospace groups.

Rolls-Royce, the aeroengine manufacturer, yesterday received a double boost as it announced that its Vickers unit had clinched a tank contract with the Ministry of Defence worth £250m, and also unveiled its own joint venture with five European aerospace groups.

The news comes as Vickers, which was acquired by Rolls-Royce last November, waits to hear whether it has won a further order for its Challenger tanks from the Greek government. The potential contract for 500 vehicles could be worth up to £2.4bn. Shares in Rolls-Royce climbed 2.5p yesterday to close at 188p.

Yesterday the company said the MoD had chosen Vickers Defence Systems (VDS) over two other bidders as the preferred supplier of 66 new Challenger tanks.

A spokesman for VDS said: "We showed the best value for money and technical solution. Rather than go to a further competitive stage, the MoD has decided to shorten the process. Now we have to go to a final contract, and agree the specifications and prices." If all goes to plan, the new system could be in operation by 2005.

Andrew Clifton, an analyst at Merrill Lynch Global Securities, said: "This MoD contract is positive news for Vickers, a useful contribution to fill capacity with some long-term service elements." Vickers has failed to pull off three huge export orders in previous decades but is thought to be the frontrunner for the Greek contract, to be announced in November.

Rolls-Royce confirmed yesterday that it had signed an agreement to collaborate on a turboprop engine for Airbus's new A400M military transport aircraft with aerospace groups including Industria de Turbo Propulsores SA, MTU Aero Engines and Snecma Moteurs.