HC Deb 21 January 1972 vol 829 cc295-6W
Mr. Onslow

asked the Secretary of State for Trade and Industry what arrangements have been made to secure the continuation of the M45H engine project.

Mr. Corfield

Development of the M45H engine for the VFW/Fokker VFW 614 aircraft was begun in 1966 by Bristol Siddeley Engines Ltd., later Rolls-Royce Ltd., in collaboration with S.N.E.C.M.A. The Federal German Government had undertaken to bear one half of the development costs then foreseen, the remainder being borne by the engine companies.

Since the appointment of the receiver, discussions have been taking place between the parties concerned with a view to arranging mutually satisfactory terms for the continuation of Rolls-Royce Ltd.'s part in the project by Rolls-Royce (1971) Ltd. in the light of the substantial cost increases that have arisen since the project was begun. I am glad to report that the Federal German Government have agreed to extend their contribution to cover one half of the development costs now foreseen.

There are a number of points still to be resolved between the firms; but provided that satisfactory contractual arrangements can be concluded, Her Majesty's Government will in turn provide up to £11 million launching aid to Rolls-Royce (1971) Ltd. to enable the company, in collaboration with S.N.E.C.M.A., to complete the development and undertake production of the engine. The necessary provision in estimates will be made in due course.