BAE Systems, the company which is building the ships with Thales, the French defence giant, has told the government the cost will rise if it wants the ships built on time, on budget and to the best capability. BAE has told the government that if it wants to have ships weighing up to 60,000 tonnes, then the cost has to rise to £4bn. However, if the government will settle for smaller 40,000-tonne ships, then the costs will come down to the original £2.9bn figure. The smaller ships would have less fighting capability - they would only be able to carry 20 fighter aircraft rather than the 48 originally planned. The latest twist in the dispute over costs has prompted fears that the project might be delayed.
BAE Systems admitted that the company had submitted a range of options and budgets to the Ministry of Defence's procurement arm but it denied that BAE was now demanding more money to build the ships. However, BAE seemed to distance itself from the original £2.9bn budget, which it claimed was always an "MoD figure". BAE is keen to let the government take more of the risk on its big defence contracts.
Senior military sources confirmed that cutting the size and payload of the "future large carriers" would have a major impact on naval strategy, undermining the purpose for which the warships were to be built in the first place. Ministry of Defence officials were sticking to the spring 2004 date to let the contract, adding that a stage of the assessment of the contract was about to begin. Analysts confirmed that the £4bn budget proposal probably was being used as a negotiation tactic ahead of formal agreement. BAE/Thales and the UK government have yet to sign a joint outline agreement.
New Bulbous Bow Longliner
Pollution Free Thordon for Newbuilds
New Dredging & Consulting Company