Two of the five bidders for the Fleet Solid Support Ships have now withdrawn.
In November last year, the list of bidders for the contract was published.
The British consortium consists of companies Babcock, BAE Systems, Cammell Laird and Rolls-Royce (Team UK) while the international bidders were Fincantieri (Italy), Navantia (Spain), Japan Marine United Corporation, and Daewoo Shipbuilding and Marine Engineering (South Korea).
Fincantieri and Daewoo Shipbuilding and Marine Engineering have now withdrawn, according to the Financial Times.
This leaves only Team UK, Navantia and Japan Marine United Corporation.
The report states:
“The commercial terms and conditions of the competition are understood to require bidders to put in significant funding in advance — a requirement that would help those bidders with access to government financing.”
This comes after the All Party Parliamentary Group for Shipbuilding and Ship Repair launched a report on the National Shipbuilding Strategy, with a special focus on the Fleet Solid Support Ship work.
The report can be downloaded here. If you want a brief summary you can head here for a run down of the recommendations.
The report states that the industry is already facing significant redundancies as the aircraft carrier programme runs down, with the subsequent loss of leading-edge skills. Once lost, these skills cannot be quickly regained and the UK’s sovereign capability to produce complex warships will suffer accordingly, as will the UK’s ability to project naval power.
The APPG states that “it is the responsibility of the Government to ensure the Royal Navy receives its equipment from a leading-edge supply chain and support structure and is therefore able to maintain its operational advantage.”
The report further calls on the Government to factor in revenue returned to the Treasury when scoring bids between domestic suppliers and foreign competitors and to acknowledge that many foreign shipyards receive both direct and indirect state subsidies.
The report also states:
“The Royal Navy depends on support ships operated by the Royal Fleet Auxiliary (RFA) during deployments. Royal Fleet Auxiliary Solid Support Ships are designed to carry a wide range of stores to support other ships in the fleet including munitions, fuel and supplies. To maintain a sovereign naval capability, consisting of all types of ships, building vessels operated by the RFA is crucial for the retention of skills needed for future warship production. Despite this, the National Shipbuilding Strategy states that only Royal Navy destroyers, frigates and aircraft carriers will continue to have a UK-owned design and be built and integrated in the UK.
As such, the Government has decided to open the procurement process for three new Fleet Solid Support (FSS) ships out to international competition with Navantia, a Spanish state-owned shipbuilding company, considered the frontrunner. The MoD states that European Union protectionism rules prevent the FSS contract being run as a UK-only competition.
The Government also believes that it can obtain lower costs and force higher levels of efficiency from domestic shipbuilders by tendering on the international market. Despite concerns raised in Parliament and by trade unions, the Government has no plans to issue any further definitions for the purposes of the National Shipbuilding Strategy. Research conducted by GMB shows that ‘warships of all kinds’ are not subject to compulsory competitive tendering.
Article 346 of the Lisbon Treaty states that ‘Any Member State may take such measures as it considers necessary for the protection of essential interests of its security which are connected with the production of or trade in arms, munitions and war material.’ The MoD alone is responsible for its definition of
warship.”
Based on evidence from experts in the field, the report calls on the Government to ensure domestic yards receive the Fleet Solid Support Ship Contract in order to ‘retain the skills needed to construct, refit and upgrade complex warships in the future’.
Come on Penny, sort it out.
It’s almost certainly Hammond causing the issues. He does seem to have it out for defence secretaries that put the security of the UK and our allies above his penny pinching…
I totally agree Callum and have stated several times previously, that this mans bean counting with a total lack of knowledge and cutting of our defence capabilities, make him tantamount to being an enemy of the state.
On a par in my mind, with that totally useless Defence Secretary John Nott who got his just deserts pre Falklands.
For god’s sake Tories give it to UK industry. You are already sending our troops to prison for their normal tours of duty in Northern Ireland…you should at least try and do your best by UK industry.
No soldier has been sent to prison yet and the number of terrorists that are facing charges under the same review out number the few soldiers that have been charged.
Still, a complete waste of time and money. When they released hundreds of prisoners in the late 90s they should have drawn a line in the sand. Everyone knows it was a dirty war but if some victims had to forgo justice for the sake of peace then so should everyone and move on. Hundreds of millions spent on legal fees that could have been used to rebuild the economy and give NI a better future.
Are you saying the relatives and loved ones of the people who were killed unlawfully on both sides just “draw a line in the sand” because some people who they probably don’t care about and have never met were released from prison at the request of negotiations they were not part of, doesn’t work like that, if you’ve lost someone and you think it was unlawful you won’t stop until justice has been served, we all expect the law to be upheld in our own country and people who commit a crime to be held accountable, tried in a court… Read more »
Yep i remember the time when it used to work like that it doesn’t seem to anymore.
@SoleSurvivor – I fully understand where you are on this issue and I share that position in theory. However (sorry!) it is not a simple ‘everyone is equal under the law’. And for one terribly pernicious reason: When a certain Tony Blair issued letters to IRA murderers giving them exemption from prosecution (aka a ‘Get Out of Jail Free Letter) he should have issued a balancing order for UK Forces who were ever engaged in the Northern Ireland conflicts. And I feel I do have to add some context here – The UK Forces were protecting UK civilians, property and… Read more »
Funny when members of the UK military in both the Bloody Sunday inquiry and in the more recent inquests have described members of the British Army as exactly people who went out to kill random nationalists (who despite their political viewpoint were and are technically British Citizens).
Are former British Soldiers lying?
Also just to point out once more MORE former Terrorists have been charged in the historic reviews than all UK soldiers combined.
@Mark – Nothing ‘funny’ about what happened in Northern Ireland. I actually made the point that the Army were defending UK citizens and by that I meant BOTH sides of that battle that raged for 30 years. they were killed by BOTH sides as they were in the middle. They did NOT side on against the other. Lets not forget the IRA (and no they were not all UK citizens by any measure and why they skulked back to protection south of the border) killed more Irish people than anyone else despite attacking innocent people on the British mainland destroying… Read more »
Hi Chris, yeah I agree with you, I said on both sides. Under the good Friday agreement terrorists on both sides republican and loyalist who were already serving time in jail were allowed early release. I don’t agree with that one bit, a lot were convicted of horrific murders of men, women and children. Also we have found out that nearly 200 “on the run” terrorists were give the immunity letters. I also don’t agree with that one bit, from what I can gather victims of these “on the runs” are still campaigning for justice, as well as MP’s. So… Read more »
@SoleSurvivor – Just a brief response if I may? We both agree that everyone should be chargable when someone does something wrong. never mind if they are a soldier or a terrorist. However (sorry again) the problem has been complicated, the clear issue of justice for all indeed has been blurred, by the issue of those letters to one side and not the other. You must surely agree that to allow one set of murderers to walk free with others having a promise of no further action while holding soldiers to account 40+ years later is neither fair or represents… Read more »
Yeah I agree that is not fair, and not justice for all, but where i think we differ is i don’t think we should not give justice to some people because others have been denied justice through actions of politicians with their own agendas. The anger should be spent towards the political establishment for not giving justice for all instead of trying to get one side off the hook as well, as that gives the impressions of bias, where as if someone were neutral they would try fight and argue for justice for all, not get one side let off… Read more »
Yes I am. You cannot release murderers from prison and tell one group of victims to for go justice for the sake of peace. Then relentlessly pursue another group to appease another set of victims. It is either justice for all or justice for no one and everyone is forced to move on and accept the trade off for peace. I have relatives that where kill during the troubles and I know there killers will never see justice or even be pursued through the courts. Yet veterins who served and may have rightly or wrongly killed during a gorilla war… Read more »
Neither side in NI, nor the UK Government wishes to do so, so we’re stuck with what we have.
That’s alright then.
There should be no fudging around the edges; just hand it to a UK yard. Up front, funding is less likely to draw foreign bidders, even though it’s possibly the safest of all bets when building for a government? This mandate should not, however, become a constraint when dealing with a domestic yard. At the end of the day, you don’t cross the channel or go cruising on these ships, they are purely support for our navy and foreign aid, so stop the nonsense and choose a builder/builders.
Surely tax returns to the treasury must by included in any cost assessment like this. It would be the most short-sighted analysis to opt for a proposal 15% cheaper, say, than a home grown solution if 25% of the latter’s price would be recouped through taxation. And what about environmental and H&S standards? We are world leaders in these considerations – should not a weighting be applied to suppliers with poorer qualifications than our own, or are we really willing to turn a blind eye to the certain injuries, possibly deaths and environmental destruction that will come by choosing suppliers… Read more »
The bids are from Japan and Spain, not some 3rd world country.
Presumably Spain’s building standards have improved since I used to visit as a kid…. Mind you Franco was barely cold in his mausoleum in those days but H&S was far from a primary concern.
Come on, everybody but few people here knows that the Spanish building standards are between the best in the whole world. No only do they produce one of the best technology applied to: high speed trains, civil engineering, wind turbines and solar panels technology, IT’s applied to defense, software simulators, space and satellite technology… And concerning shipbuilding industry they produce state of the art ships, combining the best technology, quality, systems and component platform integrations…Look out on the internet and you will see, …, and among all these things, they are price competitive as well!. Franco era?…, do you live… Read more »
Its not just pride though, there are multiple recent failures and issues at Navantia. The reports from the Helge Ingstad sinking identify potentially critical design flaws with the frigate, which are likely shared with the other members of their class and similar classes (like the base F100 and the Hobart class). Theres also the issues with the Australian LHDs built by Navantia, and their part in the below par management of the Hobart class build. All this, and they’re a government owned company, so all of their bids are subsidised by the Spanish tax payer. I’ve seen nothing online to… Read more »
Good post Nath. There is also a case for accepting a UK bid that is higher than a foreign bid on the basis that unless the local consortium’s price is significantly higher than an overseas offer, then the contribution(what used to be called Gross profit in the old days) is spent locally. A simple example would be-Overseas price=100,local price is 110 of which 20 is contribution to overheads spent in UK so net cost is 90. The Overseas price is a net total cost with no contribution to the local economy. In addition this would help preserve the broad shipbuilding… Read more »
Aargh…much HIGHER safety Standards…
I think they put them out to foreign tender to try and force the arm of Britsh Industry to offer the MOD a decent deal. Unfortunately, far to many times in the past has the MOD paid stupid amounts of money for overpriced Britsh kit, when the British companies know they will get the deal, as the Gov wants to protect British jobs and keep our industry’s alive, and keep the unions off there backs. Well, they aren’t falling for that trick anymore. Our industry’s need to be able to compete on price compared to the competition, and give us… Read more »
Going back to the sixties and seventies you were absolutely right but increasingly since then ‘competitors’ around the World have been directly and indirectly supported by all manner of means while we have applied the failed logic that survival of the fittest is the best plan. In reality these days it just means that the paper savings end up ousting more laterally as others have detailed while we help support supposedly more efficient companies abroad who are anything but in reality. Some of the French companies that now own much of our industry have always been part owned or supported… Read more »
Unions what unions?in the engineering industry they are all bought and payed for,Lindsey Oil Refinery proved that.
I don’t know what the budget is for them. But whatever the budget is, better to be as close to it as possible. Before 1 billion becomes 1.7 billion and so on. It’s our money being spent.
Anywhere but Spain.
I must admit, i was hoping that the Spaniards was one of those that had pulled out, oh well.
If not the UK then Japan for strategic reasons.
Agree, i would love to see Japan join the Tempest project.
Any hope of success outside Europe will I think be intrinsic to the relationship we build with Japan, we have increasingly an awful lot in common and much to gain by restoring the strong links we once enjoyed and expand new ones even if since then relative circumstances have reversed. We have a lot to offer each other and help retain an independence from increasingly dangerous US power struggles as much as we both have to retain good relations with them.
One has to ask why Fincantieri are now apparently waiting for further ‘instructions’from the MoD to see if they still wish to withdraw. What on earth is going on? If a bidder pulls out the only reaction should be ‘bye bye!’. Why are the MoD so needing Fincantieri back in? We have 3 bidders left in. The UK consortium are still outnumbered by state sponsored shipyards and there is also a rumour the UK Consortium are looking at withdrawing. THEN see the brown stuff hit the whirly thing. Of course demanding some up front money penalises the commercial bidders like… Read more »
Can’t remember the exact details, but isn’t it the general consensus that the Carrier Alliance, which is producing our two carriers and is a consortium of mainly UK companies, judged to be a reasonable success?
@Crabfat – Exactly right. The CA just showed what the UK manufacturing and shipbuilding industries can achieve when a mutually beneficial structure is created where the buying and building elements are partners not adversaries.
I do tend to feel that this sort of strategy gave the European countries an original advantage against us way back when UK companies were far too busy competing against each other and took their eye off the ball and blind siding from outside parties. Certainly when you see now the success stories in Uk Industry so much of it in the Space and aerospace field seem much more based around such cooperation to allow small companies bring their skills to th table and yet compete with far bigger competitors and of ourse without necessarily selling out to them along… Read more »
Splitting the work between Spain and Italy would please the PM.
Or see the fecal matter bit the rotary air impellor..
… Excreta to rotating mass interface moment?
I know the Spanish yard is state sponsored but I don’t think the Japanese yard is. In fact Japan has an open WTO case against subsidies for ship building so how could they have this if they were also subsidised?
Maybe the term ‘state sponsored’ is not strictly correct with regard to the Japanese but we should not be blind as to how they work. They very much follow the model used by the USA and their ‘USA Incorporated’ way of ensuring their manufacturing is hugely supported by Government action both directly with orders and facilitated loans and indirectly by making competition extremely difficult in their home market. I am reminded of the complaint by Raleigh decades ago (when they built bicycles in Nottingham) about the Japanese rule that imported bikes, to be approved, had to be tested by a… Read more »
Japan builds trains for the U.K. but have a rule that only Japanese train makers may make trains for Japan. Talk about being taken for complete mugs. We should not give them this British order.
@Stephen – at the risk of being labelled a Gricer I did work in the rail industry for a few years and what you write is more relevant than you realise. Yes Hitachi came to the UK and built an assembly plant promising it would be a European hub. But they only did that on the back of a huge order from the Government. Note Government NOT the private ROSCOS. Then Hitachi won additional orders from Scotland, GWR, TPE and others. So everyone thought that Hitachi would add their stir welding technology to the factory, add labour and training and… Read more »
I totally agree Chris. As well as defence one of my other passions is railways. I have also worked on the railways for a few years (Jarvis Rail then Network Rail). To use Britain’s railways exclusively to keep foreign train makers going is an absolute humiliation. Railways were always our thing, since the very beginning. Even if they got rid of everything else, like they did, they should have allowed us to keep this. But even that was unbearable to them, such was their determination to utterly destroy British manufacturing. Can anyone imagine Japan closing every single last train maker… Read more »
Stephen – like yourself two of my passions are all things Railway related and Defence,but sadly there is little chance of a successful UK Train manufacturer now.The ideal time to have set one up would have been at the same time as Privatisation happened,it was only then that the orders for new rolling stock changed from a trickle into a flood.There is a reasonably steady flow of orders now but with so much choice it would be hard to see a UK Company getting a foothold.Ive always said that what this country needs is a ‘Siemens’ , a company that… Read more »
@PaulT – In defence of Bombardier I think they can rightfully claim that they do ‘build everything’ and have been a very beneficial investor in the UK particularly in Derby for trains and Belfast for aircraft wings and other parts. But sadly the very name defines the problems a succession of British Governments have allowed / deliberately managed (depending on your politics) to bedevil British Industry. Since British Rail Engineering Limited was privatised in 1989 it has been run by a consortium led by a Swiss-Swedish firm, passed on to Germany’s Chrysler before being flogged to Canada’s Bombardier. Where were… Read more »
So 2 yards that are reportedly subsided or given government loans have dropped out. So that strategy doesn’t seem to be working for them.
Could we see a deal with Japan in exchange for buying into Tempest?
Could see a deal based on they build… We give them money…. Old concept ???
But tbere are many technology exchanges that can be done with Japan… IMHO they would be an excellent defence partner for UK. Spear3 spear 5 Tempest. next gen ASROC etc
What requirement does Japan have for a leading edge ASW platform?
I presume you’re thinking about export opportunities for the Type 26? With an emergent China and a consistently belligerent North Korea on its ‘doorstep’, I would posit Japan has a significant need for a high end surface ASW platform. China is building new submarines very rapidly and with the benefits of all the technology stolen from western defence contractors these are reportedly much quieter than previous generations of Chinese subs. I’m not too familiar with the make up of the Japanese fleet but from my limited knowledge I can’t think of any dedicated, high end surface ASW platforms. It should… Read more »
Japan is pretty capable of designing and building its own ASW Warships,i cant quite see an opportunity for a Type 26 sale but there could be potential for trade in other systems though.https://en.wikipedia.org/wiki/Asahi-class_destroyer
And one thing you can guarantee is that however strongly they like us have ties to the US, we both seriously need to expand beyond a total reliance on a very fratuous and increasingly unpredictable industrial, defence and political relationship they represent. All your eggs in that basket has been shown of late to be either a dangerous strategy or one where all interactions become increasingly one of submission to wider US policy even if at present that might hopefully be an aberration rather than continuous. But the next Trump could be around the corner now that the genie is… Read more »
UK industry has to come up with a competitive bid that
it is prepared to stick to.
No dodgy bids that over time are actually double in terms of cost. UK shipbuilding doesn’t have a great track record in delivering on time, on budget and to a quality standard.
This is taxpayers money they are spending from a finite defence budget.
Give UK personnel the equipment they need in the quantity they need to their job.
“No dodgy bids that over time are actually double in terms of cost. UK shipbuilding doesn’t have a great track record in delivering on time, on budget and to a quality standard” I am really sorry you feel the need to continually rubbish British manufacturing. I can point to ONE project alone that disproves your statement – The Carrier Alliance that delivered the two carriers on time and on budget and judging by the QE work as intended. The only delay and consequent cost increase was because the Government of the day delayed the project for a year adding £1… Read more »
The original budget for the two carriers was under £2bn per ship and they were suppose to be future proof for cats and traps and angled flight deck. The original budget for 12 t45 was £7bn. The original budget for 21 Nimrod MRA4 was £2bn. The original budget for Watchkeeper was under £1bn. CVFs and T45s delivered later than planned, Watchkeeper is still not in service being 10 years late and of course MRA4 never made it into service. Our T45 have problems operating in warm sea water. We have ordered the expensive OPVs in the world and find that… Read more »
@Mike Saul – lets discuss then Mike: CARRIERS You refer to a figure for the carriers from 16 years ago and even then misquote. The MoD, then run by Geoff Hoon, prior to signing of contracts stuck to the forecast that the carriers would cost £3 billion and arrive in 2012 and 2014. The “Main Gate” decision, formally placing the contracts for the carriers was expected in February 2004. That did not happen until July 2007, when Des Browne, yet ANOTHER Defence Secretary, finally confirmed that the carriers would go ahead, after a thorough review of the plans by Sir… Read more »
The contracts were officially signed one year later on 3 July 2008, after the creation of BVT Surface Fleet through the merger of BAE Systems Surface Fleet Solutions and VT Group’s VT Shipbuilding which was a requirement of the UK Government.The contract cost was £4,085m for two ships.
@Mike Saul – You partially quote that contracts were signed in 2008 but then forget to mention the key factors that the contract was delayed TWICE adding some £2 Bn to make it the £6 Bn I quoted. let alone the simple fact that delaying for years on end in itself adds cost if only through inflation and those delays were entirely Government decisions.
So again I would argue it is Government not British Industry that is the problem.
Yeah a big part of the trouble is the way the Treasury/MoD like to spread the financing rather than commit to procurement. The carriers could’ve been built sooner, quicker and cheaper if the Govt. committed to buying the ships at Main Gate. I would query though the level to which the design was future-proofed for CATOBAR, and why when Cameron tried to switch the QE class to CATOBAR, BAES returned an outlandish figure. Was it the cost of EMALS? I’d be interested to know whether they had considered installing steam catapults at that time, as the French intended for the… Read more »
@the_Marquis – My understanding is that it was not a BAE issue at all although they seem to be the favourite Aunt Sally for many people. The calculation was basically: Can we buy fewer F-35s (by buying the ‘C’ variant) and would that saving offset the extra cost of CATOBAR. At the time the British Converteam EMCATS was superior in performance to the General Dynamics EMALS system but neither could offer a guaranteed delivery schedule, performance specifications and no ideas on total price. There was a rumour the Americans offered EMALS for basically a round of drinks but we would… Read more »
@the_marquis – Sorry hit ‘Post’ before adding my total agreement with everything else you just posted. Excellent response Sir.
Thanks Chris, and thanks for expanding on the EMCAT/EMALS backstory, that all seems a long time ago now! Do you know whether they ever seriously considered installing steam catapults on the QE class at any point, like the French were going to do on PA2? Apparently they had already paid for a pair of 90m C13-2 catapults from the US before the project got canned. I presume the focus was always STOVL first as it was the safe and tried and tested option, easy to transfer crews from the Invincibles to the QE class and if F35 was delayed they… Read more »
@the_marquis – Again just my understanding but the French were looking at nuclear power (at the time) and therefore had ‘free’ steam to drive proven kit. Most industry people will tell you that steam cats are hard on airframes and why EMCATS / EMALS was the preferred option. trouble is as we now know EMALS does not work too well. The really sad thing for me is that the UK Converteam had the smaller EMKIT working well with over 2,500 launches of varying sized test aircraft weighing up to 11 tons at speeds of up to 50 meters per second.… Read more »
HAHA, so everything is the MoD’s fault and not the dodgy industry’s? How many times has BAE been fined again?
@John D – The only ‘dodgy’ thing here is your exaggerating someone else’s position to justify your argument. And float sarcasm as if it was fact. But in answer to your question: Twice. https://www.bbc.co.uk/news/business-13421859 Now remind me again who is it offers the contracts which are then changed late in the process, dictates the terms which are changed after contract start, starts every process off in fits and starts instead of steady pulse manufacturing and then then when it has doubled the costs by its own inabilities is stuck for money delays every contract for political reasons? Here is a… Read more »
Type 45 problems were because of a foreign part.
These problems pale into insignificance compared with some of the recent problems German shipbuilding has had with their ships. Do you see them saying we shouldn’t build ships in Germany any more? Hell no. Mistakes happen, learn from them.
What British shipyards need is a steady stream of orders (all Royal Navy and R.F.A. ships) so it is worth their while investing in new facilities and equipment which will improve our efficiency and cost effectiveness.
Stephen what do think UK shipbuilding has been doing for the past 200 years?
Despite a steady stream of orders from the UK government it has failed to produce a viable UK shipbuilding industry
@Mike Saul – Quote: “Despite a steady stream of orders from the UK government it has failed to produce a viable UK shipbuilding industry” Your argument falls down for the simple reason there has been NO ‘steady stream of orders’. That is the point so its no good rearranging facts to suit your PoV. The Astute programme, for one example, was compromised precisely because of the gap in orders. Had there been that ‘steady stream of orders’ we would likely have had more subs and the Astute would have been delivered at a lower cost. Astute (like Nimrod) is a… Read more »
Mike, you’ve got a real downer on British shipbuilding, we get it. You are completely out of step with 99% of the British people though. The vast majority want these ships, and all Royal Navy auxiliary ships, to be built in Britain. Also, we do have a viable U.K. shipbuilding industry (carriers, destroyers, frigates, submarines, R.R.S. Sir David Attenborough, O.P.V.s) what we are saying is if we also build our R.F.A. ships in house, like other major European countries, we will have an even bigger shipbuilding industry. It will be more well paid jobs for British people. The government should… Read more »
Not surpised at Fincantieri but am at Daewoo since they won the Tides last time out. Spain had no empathy for UK even within the EU let alone now.
What happened to the Littoral support ship idea? Seems to have all gone quiet, did the idea die with the defence sec change?
I viewed a top navy official saying that the littoral strike concept was being assessed and would take around a year before any concrete decisions would be made.
Heard recently that French Government used the excuse that Danone yoghurt was supplied to French Forces as a reason not to allow a foreign buy out. Why are we so submissive to the EU in allowing others to get our business! They may be more expensive to build here but the money and skilled jobs stay in UK.
i’m surprised the UK does no build some of our new Australian Navantia Joint Support Ship (JSS) Navantia Australia’s JSS design combines 70% of the load capacity of HMAS Choules LPD and 70% of the fuel capacity of the now decommissioned HMAS Success AOR The JSS has a capacity to embark a 300 strong force, up to 500 tons of vehicles, 3600 tons marine diesel capacity, 600 tons of aviation fuel and 400 tons of fresh water. The flight deck and hangar can accommodate 2 NH90 type helicopters. The well deck can launch and recover two LLCs. Navantia Australia is… Read more »