South Korean firm wins MoD deal


The Royal Navy's next generation of support tankers is to be built in South Korea, it was announced today.

Defence Equipment Minister Peter Luff said Daewoo Shipbuilding and Marine Engineering has been chosen as the Government's preferred bidder to build the four 37,000 tonne vessels costing £452 million.

The Ministry of Defence (MoD) said that although a number of British companies took part in the competition, none submitted a final bid for the build contract.

UK firms will however benefit from associated contracts - including the provision of key systems and equipment - worth £150 million. The winning design for the ships is by the British company BMT Defence Services.

"The Government remains committed to building complex warships in UK shipyards," Mr Luff said.

The MoD's chief of defence materiel, Bernard Gray, said the competition for the contract had "sought to engage shipbuilders from across the globe".

"I believe the winning bidder's solution will offer the UK the best value for money," he said.

The four Military Afloat Reach and Sustainability (Mars) tankers will maintain the Navy's ability to refuel warships at sea and will provide support for amphibious, land and air forces.

At more than 200 metres in length, each ship is as long as 14 double decker buses and can pump enough fuel to fill two Olympic-size swimming pools in an hour.

Shadow defence secretary Jim Murphy said: "This is more bad news for British industry. First we lose out to France over fast jets and now we lose out to South Korea over Royal Navy tankers.

"The Government do not have an active defence industrial strategy. I'd like to see more of our defence industry with a 'made in Britain' stamp on it. The country will want the Government to do more to support British industry."

Keith Hazlewood, national officer of the GMB union, said: "Once again, UK taxpayers' money is being spent abroad on ships which are vital for the Royal Navy to defend our shores. A proactive UK government could have put a consortium together to build these tankers in the UK. I am very angry about this and so will the UK's shipbuilders.

"This will only exacerbate the upcoming problems which we are facing throughout the UK shipbuilding industry over the workload gap.

"Surely this was work we needed to fill the gap in the programme. How can it possibly be best value to the taxpayer, essentially exporting money and jobs which should not only be spent in the UK but would also help protect design-and-build capabilities along with the obvious increased job security for the shipbuilding industry?

"The difficulties of skill retention within the industry will get worse."

An MoD source said that while they would have preferred the ship to have been been built in Britain, no UK company had entered a final bid as there was no proven track record of building tankers in the UK.

"British industry would have had to build these from scratch and that would have inevitably been much costlier, even if a UK company wanted to take this on," the source said.