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Ministry of Defence

Answer

Mr. Hoyle: To ask the Secretary of State for Defence what progress has been made with negotiating a partnering agreement between his Department and Royal Ordnance; and if he will make a statement. [104122] Mr. Kilfoyle: I am pleased to announce that, following successful negotiations between the Ministry of Defence and BAe Systems, the Ministry of Defence intends to enter into a ten year partnering arrangement with Royal Ordnance for the supply of a wide range of ammunition products produced by Royal Ordnance Weapons and Munitions Ltd. and Royal Ordnance Radway Green. The partnering arrangement will provide Royal Ordnance with a stable work load worth some £100 million per year, and will involve the Ministry of Defence and Royal Ordnance in sharing the costs, risks and benefits over the period of the arrangement. The agreement is the culmination of hard discussions over the last year. It represents value for money to the taxpayer, while preserving an indigenous ammunition manufacturing capability in the United Kingdom, which will enhance the future security of supply of ammunition for our armed forces. These advantages, which will be shared by both the Ministry of Defence and the company, are possible because partnering will provide Royal Ordnance with a stable basis from which it can invest, restructure, and reduce prices.

Secondary information

Type

Written question

Reference

104122; 341 c467-8W

Session

1999-00

Subjects

Contracts Defence equipment Procurement Ministry of Defence Royal Ordnance