§ Mr. AingerTo ask the Secretary of State for Defence if he will make a statement about the defence fixed telecommunications system. [10868]
§ Mr. SpellarThe previous Government announced on 6 November 1996,Official Report, column 521 that they intended to commence contract negotiations for the defence fixed telecommunications system with the preferred bidder, the INCA consortium led by British Telecommunications plc.
Contractual negotiations have now been successfully completed and a 10-year contract, based on the principles of the private finance initiative, has been awarded to the consortium. Under the contract, which will be signed tomorrow, ownership of and responsibility for the operation and maintenance of most of the defence fixed telecommunications assets in Great Britain will pass to the private sector. This arrangement will enable the MOD to continue to reach the required levels of performance while benefiting from access to continually evolving technology.
The contract is worth more than £800 million, which makes it the largest MOD PFI deal so far. Savings to the MOD are estimated to be more than £100 million over the 10-year period of the contract.
The contractor will perform the work currently undertaken by about 1,200 civilian and service personnel. Where appropriate, the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply. Where TUPE does not apply, the MOD will be taking all possible steps to minimise the effect on civilian staff in posts that lapse. Regrettably, the need for some compulsory redundancies among civilian staff cannot be ruled out. Military personnel occupying affected posts will be redeployed to other service duties.