Rolls-Royce secures £800m submarine propulsion contract
14 February 2013
The Ministry of Defence (MoD) has awarded an £800m contract to Rolls-Royce to deliver and maintain the UK's nuclear propulsion capability for submarines.
Under the ten-year contract, which will help sustain around 2,000 jobs across the UK, Rolls-Royce will deliver and maintain the nuclear power source for the Royal Navy’s Astute Class and future Successor deterrent submarines.
Part of the Submarine enterprise performance programme (SEPP), this contract will also help the company to transform its operations to carry out its work at best value for the taxpayer. By consolidating costs into one agreement, MoD and Rolls-Royce expect to make savings of around £200m over the next decade.
The MoD claims the contract goes a long way towards meeting the government’s commitment to SEPP, as announced in the 2010 Strategic defence and security review, to make at least £900m of savings by restructuring the UK’s nuclear submarine industry.
Productive negotiations between the MoD and Rolls-Royce mean the savings secured by this contract will not lead to any reduction in the required level of output for the submarine programme, which includes the production of the propulsion systems for the Astute and next-generation Successor classes of submarines.
Minister for Defence Equipment, Support and Technology Philip Dunne said Rolls-Royce’s work in the production of submarine propulsion systems is an important national strategic capability. "It is necessary in order to meet the present and future defence and security needs of the UK and this contract ensures the MoD can continue to benefit from this unique capability on the best possible business terms," he adds.
Contracts to deliver further savings with BAE Systems Maritime Submarines and Babcock Marine are expected to be announced in due course.