§ Mr. Spellar
I am pleased to announce the outcome of two recent ammunition competitions. First, we intend to contract with Royal Ordnance to meet most of the British Army's requirement for large calibre ammunition for the next five years. The contract will cover ammunition for 451W use with the AS90 155mm self-propelled gun, Challenger 2 tank, and a range of reconnaissance and infantry fighting vehicles.
Secondly, we intend to contract with Marconi Marine Land and Naval Systems, formerly Vickers Shipbuilding and Engineering Ltd., to develop and produce enhancements to extend the range and increase the effectiveness of the AS90 self-propelled gun. Within this contract, Royal Ordnance will be sub-contracted to manufacture new barrels, and a South African company, Somchem, will manufacture a new Modular Charge System.
These contracts, which are subject to the completion of final negotiations, are together worth around £200 million and will bring valuable work to both Marconi and Royal Ordnance, securing over 500 jobs for British industry.