Styron
23rd Jan 2005, 17:03
Treasury and MoD clash over £3bn helicopters
TRACEY BOLES
Link to Story http://scotlandonsunday.scotsman.com/business.cfm?id=83902005
THE Ministry of Defence is on a collision course with the Treasury after it emerged that Agusta Westland is due to be confirmed as a partner in a £3bn helicopter contract without a competitive tender.
The move will be a bitter disappointment for Eurocopter, a subsidiary of European aerospace giant EADS, which is hoping to enter the UK market.
The Department of Trade and Industry has backed defence secretary Geoff Hoon and procurement minister Lord Bach in designating Agusta a strategic UK supplier whose know-how and jobs need to be preserved. Defence officials have entered talks with the firm about creating an innovative partnering arrangement where both sides sit down and discuss what products are available for the money on the table, to the exclusion of other companies.
Some £3bn was earmarked to spend on helicopters in last year’s new chapter to the defence white paper. Ministers believe Agusta, whose main plant is in Yeovil, should have the work if Britain wants to maintain the ability to design and build helicopters. The contracts would ensure the Yeovil plant’s survival for years.
But the Treasury has already threatened to block the partnering arrangement; it has raised serious questions about whether the approach will offer taxpayers value for money and favours an international competition instead.
The row could escalate into a re-run of the dispute over a £800m contract for Hawk training jets which saw Geoff Hoon forced to issue a ministerial direction against his own department so that he could award the tender to UK firm BAE Systems rather than throw it out to open competition.
Again, the move was a bid to maintain the UK industrial base in line with policy.
The helicopter contracts have not yet been awarded but negotiations have already started. The MoD regards rapidly deployable helicopters as a key capability.
Westland Helicopters’ product range includes EH101, a medium lift helicopter in civil, utility, naval and search and rescue variants; WAH-64 Apache attack helicopter for the Army; and the Lynx.
Formerly owned by both GKN and Italy’s Finnemeccanica, the UK’s GKN sold its stake to the Italian company last year but its industrial footprint remains in the UK.
Eurocopter has been pushing the MoD to take its aircraft and has even offered to invest heavily in the UK.
TRACEY BOLES
Link to Story http://scotlandonsunday.scotsman.com/business.cfm?id=83902005
THE Ministry of Defence is on a collision course with the Treasury after it emerged that Agusta Westland is due to be confirmed as a partner in a £3bn helicopter contract without a competitive tender.
The move will be a bitter disappointment for Eurocopter, a subsidiary of European aerospace giant EADS, which is hoping to enter the UK market.
The Department of Trade and Industry has backed defence secretary Geoff Hoon and procurement minister Lord Bach in designating Agusta a strategic UK supplier whose know-how and jobs need to be preserved. Defence officials have entered talks with the firm about creating an innovative partnering arrangement where both sides sit down and discuss what products are available for the money on the table, to the exclusion of other companies.
Some £3bn was earmarked to spend on helicopters in last year’s new chapter to the defence white paper. Ministers believe Agusta, whose main plant is in Yeovil, should have the work if Britain wants to maintain the ability to design and build helicopters. The contracts would ensure the Yeovil plant’s survival for years.
But the Treasury has already threatened to block the partnering arrangement; it has raised serious questions about whether the approach will offer taxpayers value for money and favours an international competition instead.
The row could escalate into a re-run of the dispute over a £800m contract for Hawk training jets which saw Geoff Hoon forced to issue a ministerial direction against his own department so that he could award the tender to UK firm BAE Systems rather than throw it out to open competition.
Again, the move was a bid to maintain the UK industrial base in line with policy.
The helicopter contracts have not yet been awarded but negotiations have already started. The MoD regards rapidly deployable helicopters as a key capability.
Westland Helicopters’ product range includes EH101, a medium lift helicopter in civil, utility, naval and search and rescue variants; WAH-64 Apache attack helicopter for the Army; and the Lynx.
Formerly owned by both GKN and Italy’s Finnemeccanica, the UK’s GKN sold its stake to the Italian company last year but its industrial footprint remains in the UK.
Eurocopter has been pushing the MoD to take its aircraft and has even offered to invest heavily in the UK.