Rolls-Royce wins £1bn contract with MoD

Engineering giant Rolls-Royce is to supply reactor cores for the UK's next generation of nuclear-powered submarines in a deal worth £1.1bn.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
The Ministry of Defence has announced that it is to spend £1.1bn in preparation for souping up its nuclear submarine fleet in coming years – and Rolls-Royce has won the contract. 

Some £500m will be spent on the refurbishment of the firm's reactor factory in Raynesway, Derby – the plant that has been manufacturing and maintaining the UK’s nuclear deterrent for more than 50 years. It will now be kitted out in the latest technology and equipment, says Rolls Royce, securing some 300 jobs, and enforcing the plant’s position as a centre of nuclear reactor production.

What a coup for Rolls-Royce. It not only gets the cash to fund a state-of-the-art refit, it’s also getting a long-term contract to produce specialised cores – and any spare parts they may need (expensive widgets these are too). Around £600m of the MoD’s investment is going on these new nuclear reactors, destined for the innards of the latest Astute class and Successor class submarines.

Jason Smith, Rolls-Royce's chief operating officer, is over the moon about the deal: ‘This demonstrates the high level of trust the Ministry of Defence has in both our technology and the expertise of our highly skilled workforce,' he says.  

The Successor subs are – as the name suggests – pipped to replace the existing Vanguard fleet, which carries the Trident weapons. Vanguard will be retired in the late 2020s, so the MoD is indulging in a little forward planning here. Which is interesting, given the current ongoing argument between the Tories and Lib Dems over whether to renew the UK’s nuclear armament. Looks like the Lib Dems have lost the battle…

Given that the UK is still in recession, with austerity measures still in place, this is a seriously hefty sum to spend on future security. Especially as no official decision has yes been made about whether to press ahead with the Successor subs – and won’t be until 2016.

Defence Secretary Philip Hammond says that the nuclear investment comes within budget, however: ‘Having balanced the MoD's books we can now invest in vital strategic capabilities to meet the present and future defence needs of the UK,’ he says.

Great news for Rolls, but this could send the row within the Coalition nuclear...

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