RAF maintenance agency to be sold off as no longer 'strategic'

The Ministry of Defence is planning to sell control of its Defence Aviation Repair Agency (Dara), which repairs the Tornado GR4 attack jets used by the RAF in Iraq.

The Ministry of Defence is planning to sell control of its Defence Aviation Repair Agency (Dara), which repairs the Tornado GR4 attack jets used by the RAF in Iraq.

Adam Ingram, the Armed Forces minister, said in a letter to MPs that there was no strategic need for Dara to remain in government hands.

Allan Robertson, Dara's spokesman, said a review body would make a recommendation on the best ownership structure, which could be a private equity firm. The review is meant to conclude in the middle of the year but could take longer.

Mr Robertson said: "The review is about to appoint outside consultants who know of the Carlyles of this world."

Carlyle, a US-based private equity firm, already owns 31 per cent of Qinetiq, a part-privatised group which carries out the bulk of the MoD's non-nuclear technology research. Carlyle, which employed former prime minister John Major for a period, declined to comment on whether it would be interested in Dara.

Mr Robertson said that although Dara did not have technology, ideas and patents to exploit, it did have commercial potential in the repair of civil aircraft.

The agency was formed in 1999 from the RAF's Maintenance Group Defence Agency and the Royal Navy's Naval Aircraft Repair Organisation. It has four bases and employs 3,400 people, most of them at the headquarters in St Athan, Wales. This site houses the recently completed £80m Red Dragon super-hangar project, which is meant to form the hub of an aviation centre of excellence and attract private-sector aerospace companies.

Dara's turnover in the financial year to April was £189.5m and it had profits of £10.2m. Mr Robertson said Dara had been turned into a quasi-commercial entity, operating as a trading fund, in 2001.

Its target was to have a 3.5 per cent annual return on capital, but it had reached 6 per cent. A private equity firm or other commercial operator would look to boost this into double figures.

However, the danger for the Government is that a privatised Dara might not be able to respond appropriately in times of war, such as in Iraq.