Page last updated at 11:09 GMT, Tuesday, 20 May 2008 12:09 UK

Firms scoop 4bn carrier contract

Image of how the new carrier will look
The carriers will be about 280 metres long and weigh 65,000 tonnes.

The Ministry of Defence is set to sign a 4bn deal to build two aircraft carriers in the UK in a move expected to provide 10,000 jobs at its peak.

HMS Queen Elizabeth and HMS Prince of Wales will be built by a consortium to be formed between BAE Systems and its rival, VT Group.

Work will be carried out in Portsmouth, Barrow-in-Furness, Glasgow and Rosyth.

The project is long-awaited having been first announced in 2003, but then put off because of MoD spending plans.

The 65,000-tonne carriers are due to enter service in 2014 and 2016.

Each is likely to carry 36 fighter jets as well as four early warning aircraft.

The MoD said that the plans would be put to parliament later.

Thriving industry

The ships and their aircraft would "transform the UK's defence capabilities when they enter service, delivering air power in support of the full range of future operations at sea, in the air and on land", said First Sea Lord and chief of the Naval Staff, Admiral Sir Jonathon Band.

This plays a major part in the long term sustainability of the UK naval sector and the transformation of our business
Mike Turner
Chief executive, BAE Systems

Alex Ashbourne of Ashbourne Strategic Consulting said the deal would be "the cornerstone of British shipbuilding for probably the next 30 to 40 years".

"It's thought that manufacturing is dead in the UK, but not in the shipbuilding sector," Ms Ashbourne added.

"The MoD had to form an innovative alliance with industry to try and de-risk the programme and make sure it was as cost-effective as possible for the UK tax-payer."

"There's no denying that the defence budget is under immense pressure and these do not come cheap," Ms Ashbourne added.

'Important milestone'

The joint venture between BAE Systems and VT Group - to be called BVT Surface Fleet - will both build and support the ships from the firms' respective shipyards.

"This is an important milestone in the development of the carrier programme and plays a major part in the long term sustainability of the UK naval sector and the transformation of our business," said BAE's chief executive Mike Turner.

"The programme will provide a strong order book and forward workload over the coming years."

Other firms playing a part in the alliance include Babcock and Thales UK.

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