Rolls Royce bags 10-year contract with MoD

Rolls Royce has bagged a £800m government contract with the Royal Navy, securing 2,000 jobs. Rolls Royce  Submarines in Derbyshire won the contract which is aimed at delivering and supporting the UK’s nuclear fleet. The Rolls-Royce contract with Ministry of Defence (MoD) will support propulsion systems on Britain’s fleet of nuclear submarines, while saving the government £200m over a course of the ten-year contract period. The Derby-based group employs 21,000 people in the UK and is best known for manufacturing aircraft engines such as the Trent 900 for the A380 superjumbo.

Defence minister Philip Dunne said, “The foundation contract will help sustain around 2,000 jobs at Rolls-Royce Submarines in the UK, which provides a unique national strategic capability that has a vital role to play in meeting the present and future defence and security needs of the UK.”

The contract award from the government comes at a time when India has threatened to cancel £480m order with Britain’s only helicopter factory, over claims of bribery at Westland’s Italian parent. The Rolls-Royce contract could face negative impact with the ongoing political uproar in Italy which has UK-based manufacturer at the centre of the scandal. Rolls-Royce itself has been muddled in bribery allegations pertaining to its business in China, Indonesia, which came under scrutiny in recent past.

The chief executive of Italian conglomerate Finmeccanica, Giuseppe Orsi, has been arrested by Italian police amid allegations that he bribed Indian ministers to win a contract to supply luxury helicopters to transport India’s prime minister. India’s defence minister AK Antony said he would cancel the whole of the $750m (£480m) 12 helicopter deal with Finmeccanica’s AgustaWestland subsidiary if the country’s central bureau of investigation finds out bribes were paid to Indian officials.

Amid the Rolls-Royce contract, the Indian bribery case is also being closely watched in Yeovil because all of the helicopters are being built at the AgustaWestland factory in the Somerset town. Three of the AW101 helicopters have already been built, and the remaining nine are to be finished this year. AgustaWestland is Yeovil’s biggest employer with 3,500 staff.

The cancellation of the Indian contract would not jeopardise Yeovil factory’s operations, but the site is entering a crucial year as the Department for Transport (DfT) prepares to award a 10-year contract for the UK search and rescue service, which will require new helicopters.