§ Mr. CohenTo ask the Secretary of State for Defence if he will make a statement about the explosives, propellants and related products agreement with Royal Ordnance. [30507]
§ Mr. FreemanThe explosives, propellants and related end products agreement between the Ministry of Defence and Royal Ordnance plc—now the Royal Ordnance division of British Aerospace Defence Ltd.—was signed on 28 July 1988. Under EPREP, the Ministry of Defence had to purchase 80 per cent. of its requirements for certain natures of ammunition and explosives from Royal Ordnance during the five-year period from 1 April 1988 to 31 March 1993.
The agreement was part of the arrangements for the sale of the Royal Ordnance factories to British Aerospace. The guarantee of a core work load over the five-year period assisted in establishing the newly privatised company as an efficient competitor and provided a guaranteed source of supply to the Ministry of Defence during what would otherwise have been a period of instability.
The value of the orders placed with Royal Ordnance under the EPREP agreement was £560 million and covered over 40 types of ammunition.