Rivals circle helicopter contract

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British Aerospace and GEC, preparing to contest the takeover of VSEL, are also being drawn into increasing competition over rival bids to supply the British Army's attack helicopter for the next century.

With the remorseless consolidation in the defence industry threatening to crush many firms, pressure to win the pounds 2bn order to supply 91 gun- and missile-armed "flying tanks'' is intense.

GKN's Westland, the other major UK company involved in the struggle, is hoping its rivals will take their eyes off the ball as the VSEL bid hots up.

All sides are preparing to step up campaigns to win hearts and minds at the Ministry of Defence. The MoD's technical team has been evaluating the bids and the department is due to make its recommendation to the Cabinet later this month.

Until recently, the lead contenders were seen to be the AH-64 Apache, to be built by McDonnell Douglas and Westland, and the Eurotiger, to be built by the Franco-German Eurocopter consortium and BAe.

The Netherlands recently confirmed an order for the Apache, which is also believed to be the British Army's favourite. The Tiger is not highly regarded, mainly because it is a relatively small helicopter and although it meets the MoD's stated requirement, the same helicopter cannot carry all the weapons systems likely to be needed.

The Cobra Venom, a new version of the highly successful Bell Cobra for which GEC would build the most advanced and "user-friendly" cockpit, has emerged as the dark horse in the race. This follows news of proposals by the US Navy for US/ UK co-operation which would enable the Cobra Venom to carry the same weapon load as the Apache, including 16 anti-tank missiles, as against the Tiger's eight. The Cobra is therefore likely to be the Apache's main competition.

US/UK co-operation on the Cobra Venom would involve the US developing a four-bladed rotor for the Cobra, which currently has two, to enable it to carry more ordnance. The British firm GEC would develop the cockpit.

The result, Bell claims, would be as formidable as Apache but cheaper, more rugged and more reliable. Bell also claims the new high-technology cockpit represents the largest and most significant British industrial component of any of the contenders. BAe's role in the Tiger, for example, would be to build the tail of the aircraft.

A crucial advantage is that the new Cobra is marinised - made resistant to saltwater spray to allow operation from ships. The Apache faced severe problems in the Gulf War, and Bell claims that the Cobras flew twice as many sorties as the Apache with one third the number of aircraft.

When the British Army's requirement for an attack helicopter was drawn up, it was still based on the need to halt a massive Russian-style tank attack on the plains of Europe - a battle not dissimilar to that which was actually played out in the Iraqi desert. The British Army view was conditioned, not unreasonably, by the thought that whatever the US Army had must be the best.

But the British Army now recognises that the most likely type of operation will involve small numbers of helicopters operating in less flat terrain and possibly needing to operate from ships. The logistic back-up for Army helicopters is optimised for fighting in large formations, not for small groups with limited local resources. Therefore, Bell sources claim, the link with the US Marine Corps could be more appropriate to new and different kinds of warfare.

The Apache AH-64 is a formidable if complex helicopter, but relatively expensive. Whichever helicopter wins the competition will have to carry the Starstreak missile system, built by Shorts of Belfast. McDonnell Douglas and Bell have both been in discussion with Shorts, and the Starstreak could be fitted to operations which involve small numbers of helicopters working in less flat terrain and possibly needing to fly from ships.

What makes the decision facing Roger Freeman, the defence procurement minister, so difficult is that none of the helicopters is of domestic origin. Choosing a model solely on military grounds is not an option because the spin-off work for the UK defence industry is particularly crucial.

Westland would ship in part-built Apaches and fit them with engines and electronics. The company said the UK manufacturing content would be 40 per cent and would mean work for Shorts in Belfast, Hunting, and Racal.

An order for the Tiger would supply BAe with 20 per cent of the work and would mean building an assembly at its site near Guildford. It would also involve BAe supplying the Trigat missile. Rolls-Royce has a 20 per cent stake in the engine being fitted to the Tiger.

The Cobra Venom would be shipped to the UK in parts and assembled by GEC-Marconi, which is building the cockpit. The technology being used in the Venom has the highest UK content, and the helicopter is arguably the most British of the three.