§ Mr. BluntTo ask the Secretary of State for Defence (1) what financial inducements his Department has received in order to procure two extra ALSLs beyond the requirement identified in the Strategic Defence Review; [150279]
(2) what assessment his Department has made of the warship building capacity in the UK required to meet the future requirements of the Royal Navy; how this is affected by the ALSL procurement decisions; and if he will make a statement; [150273]
(3) what his estimate is of the additional cost of splitting the construction of four ALSLs between Swan Hunter and BAE Systems Marine rather than constructing all four ships on Tyneside; [150274]
(4) what the additional cost is of four ALSLs rather than two; [150275]
(5) what the value of the contracts placed with Swan Hunter and BAE Systems Marine is for each to supply two ALSLs; and what is the price differential between the two companies; [150276]
(6) on what grounds Appledore/BMT was not considered for the build of two additional ALSLs; [150277]
(7) what industrial factors were taken into account in his decision to allocate construction of two ALSLs to BAE Systems Marine; and if he will make a statement. [150278]
§ Dr. Moonie[holding answer 15 February 2001]: The invitation to tender issued in April 2000 was based on our original requirement for two Alternative Landing Ship Logistics (ALSL) with an option for up to a further three. Bids were submitted by interested companies on this basis. In light of recent operating experiences, in particular in Sierra Leone and Mozambique, we decided to procure a further two ALSLs making four in total. These vessels will provide us with significantly enhanced operating capability, in particular increased lift capacity and the ability to off-load in a wider range of sea conditions. They will also provide better long-term value for money for the taxpayer than running a mixed fleet of two new ALSLs and three ageing LSLs until the latter are replaced. Funding for the extra vessels will come from the Defence Votes.
In deciding where to place the contract for the additional two ALSLs, all the shipyards associated with the final tender process were considered. A range of factors were taken into account including value for money considerations and operational benefits resulting from an early delivery. On balance, the best option was for two vessels to be built by Swan Hunter and two by BAE Systems Marine using a common design.
553WThe estimated value of both contracts will be £300 million but this is dependent upon the successful conclusion of the negotiations currently under way with BAE Systems Marine. The price for tho two vessels to be built by BAE Systems Marine at Govan will be governed by the firm price agreed for the two vessels being built at Swan Hunter.
The detailed costs associated with a split order are commercially sensitive as we are currently negotiating separately with Swan Hunter for lead yard service support to Govan, and with BAE Systems Marine for the build of the two additional ALSL vessels at Govan. This information is therefore withheld under Exemption 7 (effective management and operations of public service) of the Code of Practice on Access to Government Information.
We keep under review a broad assessment of whether there is sufficient capacity in UK shipyards to undertake our forward Royal Navy and Royal Fleet Auxiliary shipbuilding programme. Our assessment indicates that there remains sufficient capacity in UK shipyards to undertake our current and forward warship building programme including all four ALSLs.