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Mike Turner, BAE’s chief executive, was said to be furious at the news that Amec, the construction and project management company, has been drafted in as the MoD’s private advisers on the £3 billion project.
The move is a big embarrassment for BAE, undermining its role as prime contractor on the prestigious contract and implying that the MoD has doubts about the company’s ability to deliver the programme on time and within budget.
According to one source: “The MoD has decided it cannot rely on BAE, and so has decided to bring in another party (Amec) to sit on BAE’s shoulder.”
BAE said: “It is our understanding that Amec’s precise role has not been agreed. We still have many questions about why Amec may be brought in.
“As prime contractor we would ask: how is this going to work. Mike (Turner) is not overwhelmingly enthusiastic.” BAE warned that Amec’s involvement could delay the carrier’s timetable.
Amec, with a £5 billion turnover, is an international project management company with extensive experience in the oil, gas and transport sectors. Its chief executive, Sir Peter Mason, is a non-executive director at BAE. A spokesman at BAE said: “Any annoyance we might feel is not directed at Amec personally.”
BAE and Thales have still to decide the final design and construction timetable of the vessels. This is not expected until about May next year.
BAE said: “We thought we had a clear understanding over our position. Now the MoD want to play a deeper role, but bringing someone else to the table may not help.”
Last year BAE’s shares tumbled after a public squabble with the Ministry over delays and cost overruns on two projects — the Astute submarine and the Nimrod surveillance aircraft.
BAE then fought a tough battle to convince the MoD it should become prime contractor on the carrier project, but was still forced to accept Thales, of France, as its partner.
The partnership was billed as a new era in BAE’s relationship with the MoD, which accounts for 28 per cent of the company’s business. In a unique arrangement, BAE, Thales and the MoD formed a subsidiary. Ministry officials oversaw the sometimes tense relationship between the two companies agreed to share the risk of cost overruns.
Despite rumours that BAE and Thales got off to a difficult start, senior sources at both companies said recently that they have been working well and that the timetable was on track.
However, there have been several reports that the 60,000-tonne carriers, to be called HMS Queen Elizabeth and HMS Prince of Wales, cannot be built to budget.
The vessels, which will be the largest carriers outside of America, may have to be shortened, have their weight reduced to about 50,000 tonnes, and carry fewer aircraft. Amec is expected to immediately review those plans on behalf of the MoD.
The carriers will be built in separate sections at shipyards around Britain before being assembled at Roysth, Scotland. It is possible that Amec could oversee that work, which would go to the heart of BAE’s role in the project.
One City analyst, who asked not to be named, said: “Is this another BAE project going wrong? I don’t know, but it sends out all the wrong signals. It seems to me that bringing in another party (Amec) will just confuse things.”
Amec, which employs 45,000 people, owns the Wallsend shipyard on the River Tyne, where it makes oil platforms and support vessels. It led the clearance of Ground Zero in New York after the September 11 terrorist attacks.
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