Tyneside may land £300m carrier deal

Sep 2 2008 by Ben Guy, The Journal

TYNESIDE is in line for a massive economic boost with the potential award of a £300m contract to help build two new British aircraft carriers.

A review by defence chiefs of the £4bn aircraft carrier programme could see key elements of the work switched from Barrow in Cumbria to Tyneside in a bid to save costs, with the possibility of hundreds of jobs in the pipeline.

Contractors in Tyneside are currently lined up to build steelwork sections of the lower part of the vessels.

They would be sent to Barrow and integrated into larger sections of the ships. The sections would be transported by sea from Barrow to Rosyth in Scotland for final assembly.

But industry and Ministry of Defence (MoD) chiefs may decide it would cheaper to do all the initial £300m building work on Tyneside.

The ships are being built by an alliance that includes the MoD as well as defence giants BAE systems and VT group. They are expected to finalise the review later this month.

Northern Defence Industries, which works with hundreds of companies across the region, said it would welcome new work coming to Tyneside and stressed the workforce has the expertise to help build the new vessels.

Managing director Trevor Harrison said it was extremely important to carry out the carrier work in the most cost- effective way: “There is no question that the capabilities are here because of the pre-qualification work that goes on in these large contracts.”

Any move to Tyneside would make a big difference in terms of jobs to be created, he added.

And the Tyne Carrier Association could be in pole position to secure the work if it moves to Tyneside.

It has already been selected by BAE to supply more than 40 hull units worth around £200m, securing the work of 400 staff on the Tyne. It was also due to second scores of workers to work in Barrow.

Dave Skentelbery, managing director of A&P Tyne, which is a Tyne Carrier Association member with McNulty of Jarrow, said it was good project management to regularly assess costs and expressed hope that Tyneside could benefit.

“We do hope to get a good share of the work and we believe we will get a good share following the review. We believe we will be able to put together a value-for- money solution,” he added. A BAE spokesman said incentives in the contract encouraged all parties to continuously strive to find ways to cut the cost of the carriers.

But he said it would be inappropriate to comment on any detailed options still under consideration with no decision yet been made.

The MoD issued a similar statement, adding that any changes would require agreement of all alliance partners including itself.

We do hope to get a good share of the work and we believe we will get a good share