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| Royal Navy Type 31 frigate order goes to Babcock | Royal Navy Type 31 frigate order goes to Babcock |
| (about 1 hour later) | |
| The race to design and build a new generation of Royal Navy frigates has been won by a consortium led by Babcock. | The race to design and build a new generation of Royal Navy frigates has been won by a consortium led by Babcock. |
| The firm has been named preferred bidder for the £1.25bn contract for five Type 31 warships. | The firm has been named preferred bidder for the £1.25bn contract for five Type 31 warships. |
| The deal secures hundreds of jobs at Rosyth in Fife, where the ships will be assembled, with construction work spread between yards across the UK. | The deal secures hundreds of jobs at Rosyth in Fife, where the ships will be assembled, with construction work spread between yards across the UK. |
| Work is to begin by the end of 2019, with the first ships delivered in 2023. | Work is to begin by the end of 2019, with the first ships delivered in 2023. |
| The Type 31 is a smaller, cheaper frigate than the Type 26 warships currently being built at the Upper Clyde shipyards. | The Type 31 is a smaller, cheaper frigate than the Type 26 warships currently being built at the Upper Clyde shipyards. |
| With a price ceiling of £250m per ship, the aim is to maintain the size of the Navy's surface fleet and generate export orders. | With a price ceiling of £250m per ship, the aim is to maintain the size of the Navy's surface fleet and generate export orders. |
| Ahead of the preferred bidder being announced to the stock exchange, Prime Minister Boris Johnson said the modular construction method would support 2,500 jobs throughout the UK. | Ahead of the preferred bidder being announced to the stock exchange, Prime Minister Boris Johnson said the modular construction method would support 2,500 jobs throughout the UK. |
| He said: "This is an industry with a deep and visceral connection to so many parts of the UK and to the union itself. | He said: "This is an industry with a deep and visceral connection to so many parts of the UK and to the union itself. |
| "My government will do all it can to develop this aspect of our heritage and the men and women who make up its workforce - from apprentices embarking on a long career, to those families who have worked in shipyards for generations." | "My government will do all it can to develop this aspect of our heritage and the men and women who make up its workforce - from apprentices embarking on a long career, to those families who have worked in shipyards for generations." |
| Scottish Secretary Alister Jack said Scotland was at the "forefront of a renaissance in UK shipbuilding". | Scottish Secretary Alister Jack said Scotland was at the "forefront of a renaissance in UK shipbuilding". |
| "This is a clear show of support for the UK defence sector, the role it plays in keeping the United Kingdom secure, and its contribution to Scotland's prosperity through high-skilled employment and investment," he added. | "This is a clear show of support for the UK defence sector, the role it plays in keeping the United Kingdom secure, and its contribution to Scotland's prosperity through high-skilled employment and investment," he added. |
| The Babcock team's Arrowhead 140 design beat off competition from a Cammell Laird/BAE Systems consortium and a third bid led by Atlas Elektronik UK. | The Babcock team's Arrowhead 140 design beat off competition from a Cammell Laird/BAE Systems consortium and a third bid led by Atlas Elektronik UK. |
| The winning consortium also includes Thales, BMT as well as Ferguson Marine, based in Port Glasgow and Harland and Wolff in Belfast - both of which are currently in administration. | The winning consortium also includes Thales, BMT as well as Ferguson Marine, based in Port Glasgow and Harland and Wolff in Belfast - both of which are currently in administration. |
| Last month, Babcock insisted these firms' financial difficulties would not affect its bid because its "flexible build approach" could accommodate "a range of delivery sites". | Last month, Babcock insisted these firms' financial difficulties would not affect its bid because its "flexible build approach" could accommodate "a range of delivery sites". |
| Type 31 - the 'Lidl frigate' | Type 31 - the 'Lidl frigate' |
| Three different designs were in the running for the Type 31 contract but they all have something in common - they're cheap. | Three different designs were in the running for the Type 31 contract but they all have something in common - they're cheap. |
| The price cap of £250m per ship might sound a lot of money but, to put it in context, the bill for the eight Type 26 frigates currently under construction comes to about £8bn. | The price cap of £250m per ship might sound a lot of money but, to put it in context, the bill for the eight Type 26 frigates currently under construction comes to about £8bn. |
| The extremely tight cost constraints on the new ship have led some critics to describe it as "the Lidl frigate". | The extremely tight cost constraints on the new ship have led some critics to describe it as "the Lidl frigate". |
| Each bidder has tried to keep the price down by basing their designs on successful existing ships rather than starting from scratch. | Each bidder has tried to keep the price down by basing their designs on successful existing ships rather than starting from scratch. |
| Babcock's "Team 31" design is derived from the Iver Hutfeldt frigates developed for the Danish navy. | Babcock's "Team 31" design is derived from the Iver Hutfeldt frigates developed for the Danish navy. |
| Plenty of flexibility has been factored in - equipment can be upgraded or reconfigured to increase operational flexibility. | Plenty of flexibility has been factored in - equipment can be upgraded or reconfigured to increase operational flexibility. |
| The ship is sometimes referred to as the Type 31e - the "e" standing for exportability. | The ship is sometimes referred to as the Type 31e - the "e" standing for exportability. |
| The hope is that this "bargain basement ship" will prove its worth and orders from foreign navies will lead to economies of scale that will drive down costs. | The hope is that this "bargain basement ship" will prove its worth and orders from foreign navies will lead to economies of scale that will drive down costs. |
| Such value for money, some argue, might even tempt the Royal Navy to bolster its surface fleet by increasing the order. | Such value for money, some argue, might even tempt the Royal Navy to bolster its surface fleet by increasing the order. |
| Political sensitivities | Political sensitivities |
| The last big frigate order - for the Type 26 - was announced in the summer of 2014, just months before the Scottish independence referendum, with the work going to the BAE Systems yards in Glasgow. | The last big frigate order - for the Type 26 - was announced in the summer of 2014, just months before the Scottish independence referendum, with the work going to the BAE Systems yards in Glasgow. |
| While the government insisted this was a value-for-money decision, many pro-union campaigners argued it demonstrated the benefits of being part of the UK. | While the government insisted this was a value-for-money decision, many pro-union campaigners argued it demonstrated the benefits of being part of the UK. |
| The 2015 Strategic Defence and Security Review scaled back the expected size of the Type 26 fleet from 13 to eight ships - and instead proposed building "at least five" new general purpose frigates, at a much lower cost. | The 2015 Strategic Defence and Security Review scaled back the expected size of the Type 26 fleet from 13 to eight ships - and instead proposed building "at least five" new general purpose frigates, at a much lower cost. |
| With no guarantee this work would come to Scotland, pro-independence campaigners condemned this as a broken promise. | With no guarantee this work would come to Scotland, pro-independence campaigners condemned this as a broken promise. |
| In 2017, the government's new National Shipbuilding Strategy, based on Sir John Parker's independent review, sought to encourage competition in naval procurement, with an emphasis on supporting shipyards across the UK. | In 2017, the government's new National Shipbuilding Strategy, based on Sir John Parker's independent review, sought to encourage competition in naval procurement, with an emphasis on supporting shipyards across the UK. |
| The choice of Babcock - with its Rosyth site playing a key role in construction but with work spread across various UK sites - is in line with this strategy. | |
| It also reduces the government's reliance on BAE Systems, which has long been the dominant force in naval shipbuilding. | It also reduces the government's reliance on BAE Systems, which has long been the dominant force in naval shipbuilding. |
| The rival BAE systems bid would have seen the company providing design expertise but the bulk of construction would have taken place at the Cammell Laird in Merseyside. | The rival BAE systems bid would have seen the company providing design expertise but the bulk of construction would have taken place at the Cammell Laird in Merseyside. |