Patrick Durrant | Sydney
The UK Defence Secretary Sir Michael Fallon has announced the signing of a long anticipated contract worth around £3.7 billion ($6.25b) to start building the Royal Navy’s Type 26 Frigates, a variant of which has been submitted by BAE Systems for consideration under Australia's Project Sea 5000 (Future Frigates).
The deal covers the building of the first three of eight frigates planned for the RN.
Back in March 2010, BAE had signed the £127 million design contract for the Type 26, with the last of the six Type 45 destroyers launching on the Clyde in October of that year. Only in February 2015 did the MoD sign an £859 million initial development deal on the new design and as late as June 2016 Secretary Fallon had said no deal to build the Type 26 would be signed until the program offered "value for money".
In making the contract announcement Secretary Fallon said steel on the first ship would be cut later this month.
“These ships will be a force to be reckoned with, there to protect our powerful new carriers and helping keep British interests safe across the world.”
Fallon said the contract had been structured “to ensure value for taxpayers’ money and ... [would] protect them from extra bills from project overrun”. Apparently the contract is specifically structured to motivate both sides to deliver to a successful outcome where both parties share in the “pain and gain in the delivery of the program”, to quote the MoD release.
The ships have been designed to specialise in anti-submarine warfare, with flexibility incorporated to allow their cabilities to be adapted throughout their lifespan to counter future threats.
The deal reaffirms the commitment made by the UK Government in the 2015 Strategic Defence and Security Review (SDSR15) to build eight Type 26 ships. The contract for the second batch of five ships is expected to be negotiated in the early 2020s.
The MOD release said the Ministry “is exploring potential export opportunities where there is strong interest from international customers”.
BAE Systems Australia CEO Glynn Phillips said the news was exciting, representing as it did a a turning point for the Type 26 Global Combat Ship program.
“This milestone means the Royal Australian Navy should have full confidence that our offer for Sea 5000 – the Global Combat Ship-Australia – will have the largest growth margins of any ASW frigate in the world and will remain at the leading edge of naval technology throughout its service life.
“The potential for concurrent production in Glasgow and Osborne also means the Commonwealth stands to receive full knowledge sharing from a live program through BAE Systems’ best-practice exchange, significantly de-risking Sea 5000.”