US group in nuclear weapons contract

AN AMERICAN-LED consortium was yesterday awarded a pounds 2.2bn contract to take over the Government's nuclear weapons programme.

The 10-year contract to manage the Atomic Weapons Establishment at Aldermaston has been won by a consortium of Lockheed Martin, the US defence contractor, Serco and British Nuclear Fuels. Shares in Serco surged by more than 100p to 2030p - a rise of 5 per cent - on the announcement.

The consortium, known as AWE Management Limited, will be responsible for managing Britain's nuclear deterrent which now consists solely of the Trident submarine fleet.

AWE Management will also be responsible for maintaining the existing stockpile of nuclear warheads and decommissioning the RAF's freefall nuclear bomb, WE177, which has been taken out of service.

AWE Management will take over the contract next April. The present contractor, Hunting BRAE, which bid unsuccessfully for a renewal of its franchise, said it was disappointed by the MoD's decision. Hunting was awarded a seven-year contract in 1993, worth about pounds 220m a year to the company.

The other bidder was a consortium of Babcock, W S Atkins and Science Applications International.

An MoD spokesman stressed that the decision to appoint a new contractor did not reflect any disappointment with the government-owned/contractor- operated arrangement at Aldermaston which had worked well for the taxpayer.

Both of AWE's sites at Aldermaston and Burghfield will remain under government ownership. But the MoD said that a separate study would be undertaken into the possibility of closing the Burghfield site.