Navy's aircraft carriers face delay
By Sylvia Pfeifer, Defence Industries Correspondent
Published: February 21 2008 02:00 | Last updated: February 21 2008 02:00
The construction of the Royal Navy's two aircraft carriers could be delayed by up to 12 months as the Ministry of Defence faces an estimated budget shortfall of £2bn over the next three years.
One of the recommendations presented to senior defence officials and service chiefs yesterday was that the MoD agree a manufacturing contract with the industry alliance building the ships within weeks but delay construction.
If the government goes ahead with the plan, it would set alarm bells ringing in Britain's shipyards. The yards have been hiring in anticipation of the £4bn project and could have to lay off key workers.
Sources close to the talks believe that by agreeing the contract the MoD would be able to limit any political fallout from subsequent delays.
Signing the contract now would also allow the shipbuilding joint venture between BAE Systems and VT Group to go ahead. The two companies have been poised to agree the project for several weeks but have been waiting for the green light from government.
BAE said: "Negotiations regarding the proposed joint venture with VT are at an advanced stage . . . The signature of the joint venture agreements is also dependent upon the signature of contracts for the aircraft carriers and we are working closely with the MoD to ensure that these are placed as soon as possible."
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