BAE Secures Warship Contract Worth $4.8 Billion From U.K. Government
02 July 2017 - 9:30AM
Dow Jones News
By Robert Wall
LONDON--The British government signed a long-anticipated 3.7
billion pound ($4.8 billion) contract with BAE Systems to start
building three new warships after protracted contract talks.
The three frigates, called the Type 26, are the first of a batch
of eight ships Britain is buying for the Royal Navy.
"We will cut steel on the first ship later this month--a hugely
significant milestone that delivers on our commitment to maintain
our global naval power," British Defense Secretary Michael Fallon
said in a statement Sunday.
The U.K. originally was going to buy more of the ships, but cut
the number in a cost-savings move during a defense review in 2015.
Instead, it said it would follow procurement of the
submarine-hunting warships with a new program for lower-cost, more
exportable vessels.
The British Defense Ministry said the first Type 26 would enter
service after 2020 without giving a precise data. Past warship
programs in the U.K. have suffered delays.
The government said the contract with BAE Systems would be
structured to share benefits if things go smoothly while the pain
of any delays would be partly borne by industry.
The purchase of the remaining five ships won't be finalized
until the next decade, the ministry said.
The U.K. also is in the process of introducing two new aircraft
carriers. The first, the HMS Queen Elizabeth, took to the sea for
the first time last week. It will be formally handed over to the
Royal Navy later this year.
-Write to Robert Wall at robert.wall@wsj.com.
(END) Dow Jones Newswires
July 01, 2017 19:15 ET (23:15 GMT)
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