§ The Minister of State, Ministry of Defence (Mr. Adam Ingram)We announced in February 2002 that the British-based consortium Paradigm Secure Communications had been selected as preferred bidder to supply the SKYNET 5 satellite communications service to the MOD under the Private Finance Initiative.
I am pleased to announce that last Friday contract negotiations were successfully concluded and that the SKYNET 5 PFI contract, the biggest yet placed by the MOD, has been enacted.
The full value of the contract, which is planned to run until 2018, is expected to be around £2.5 billion and Paradigm expect it to create or sustain up to 1,900 jobs across the UK at its peak.
10WSThe MOD is getting this service at a significant value for money advantage compared to the costs that would have been associated with a more traditional procurement route.
The move to a PFI approach and accompanying fresh and innovative thinking has resulted in substantial savings. SKYNET 5 is within budget and remains on target to achieve initial provision of new services from 2005. It is a clear example of how we are getting better military capability and better value for money by using Smart Acquisition principles.
This deal will provide the MOD with a number of benefits, including transfer to risk to the contractor. SKYNET 5 will also provide a greatly improved service with regular technology upgrades, and the flexibility to cope with the growth in military satellite communications requirements we expect over the next few years.
The events of 11 September 2001 provided us all with a timely reminder to make sure that our key military communication and information systems have the necessary resilience to ensure business continuity. SKYNET 5 services will provide this assurance under almost any conceivable scenarios.