Blow for UK MoD As Italian, Korean Yards Withdraw from LShip Tender (excerpt)
(Source: Financial Times; published May 19, 2019)
By Sylvia Pfeifer
LONDON --- Two of the world’s biggest shipbuilders have pulled out of the competition to build three new support vessels for the Royal Navy in what will be seen as a blow to the Ministry of Defence’s plans to open it to international tender.

Italy’s Fincantieri and Daewoo Shipbuilding and Marine Engineering (DSME) of Korea were among five yards shortlisted in December by the MoD to compete for the £1bn contract but have now withdrawn, several people familiar with the process confirmed.

Their withdrawal leaves just three bidders: Spain’s Navantia, Japan Marine United Corporation and a consortium dubbed Team UK, comprised of Britain’s main shipbuilders, BAE Systems, Babcock International, Cammell Laird and Rolls-Royce.

Signalling the possibility of an even bigger blow to the competition, two people close to the process told the Financial Times of a debate within Team UK about whether the consortium should stay in.

The commercial terms and conditions of the competition are understood to require bidders to put in significant funding in advance — a requirement that would help those bidders with access to government financing. A third person, however, played down the suggestion that the consortium might withdraw.

The competition for the three Fleet Solid Support (FSS) ships has been controversial from the start with the MoD coming under fire over its decision to put the contract out to international tender amid rising fears of job losses at British shipyards. (end of excerpt)

Click here for the full story, on the Financial Times website.


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