VT in £400m deal with Oman

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The Independent Online

VT, the Portsmouth-based warship-builder, has signed a £400m deal to supply the Gulf state of Oman with heavily-armed ocean patrol vessels - the first export order from a UK naval yard in a decade.

Production of the three vessels, each the size of a mini-frigate, will start immediately, helping to safeguard the 1,000 jobs at VT's south-coast yard.

The ships, 100 metres long and equipped with Exocet surface-to-surface missiles and Mica surface-to-air missiles, will enter service from 2010 and will be used by Oman to enforce its 200-mile economic exclusion zone.

VT beat Dutch and Korean rivals to the order, which cements the firm's long-standing relationship with Oman. VT supplied the Gulf state with fast attack craft in the 1980s and corvettes in the early 1990s.

The company is hopeful of other orders in the Middle East, with Kuwait in the market for fast attack craft and Saudi Arabia looking to buy more minehunters.

VT was named preferred bidder for the Oman order last April, but the deal was only signed by its chief executive, Paul Lester, in Muscat on Monday.

The ships will be constructed at Portsmouth alongside a new fleet of Type 45 destroyers being built by VT and BAE systems for the Royal Navy.

VT is in discussions to combine the yard with BAE's facilities on the Clyde in Glasgow to form one UK naval shipbuilder. The aim is to reach an agreement in the next three months. The two companies will also be the main contractors building two new aircraft carriers for the Navy.