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S. Korean Yard To Build U.K. Fleet Oilers

Feb. 22, 2012 - 01:06PM   |  
By ANDREW CHUTER   |   Comments
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LONDON — South Korea’s Daewoo Shipbuilding and Marine Engineering has won a 452 million pound ($715.2 million) deal to equip Britain’s Royal Fleet Auxiliary (RFA) with new military tankers.

The South Korean yard has been named preferred bidder to build, in South Korea, four 37,000-ton auxiliary oilers using a design from leading British naval consultants BMT Defence Services.

The British Ministry of Defence said no British companies had submitted final bids to build the vessels.

Local industry here would benefit to the tune of about 150 million pounds from equipment, design, customization and other contracts, the MoD said.

Bernard Gray, the boss of the MoD’s procurement arm, the Defence Equipment and Support organization, said the selection “offered the best operational capability at the lowest whole-life cost.”

The MoD declined to name the losing bidders, but industry sources here said Daewoo beat out competition from Hyundai of South Korea and Fincantieri of Italy.

Despite that, Jim Murphy, the opposition Labour Party’s shadow defense secretary, criticized the deal for not buying British.

“This is more bad news for British industry. First, we lose out to France over fast jets and now, we lose out to South Korea over Royal Navy tankers.

“The government does not have an active defense industrial strategy. I’d like to see more of our defense industry with a ‘made in Britain’ stamp on it. The country will want the government to do more to support British industry,” he said.

A recent government white paper on defense industry policy created some concern, saying it would focus more on open competition and off-the-shelf procurement in the future.

Sang-Tae Nam, the president and chief executive of Daewoo Shipbuilding, said in a statement, “This significant win in the U.K., coupled with our recent Indonesian submarine order, helps to further broaden our international business credentials. Exporting these MARS tankers to the U.K. adds to our already strong and competitive portfolio, and we have no doubt that the great and longstanding relationship between DSME and BMT will be strengthened by this success.”

The first of the double-hulled vessels is scheduled to be delivered to the RFA in 2016 and, for the moment, the oilers are the only visible part of a Military Afloat Reach and Sustainability (MARS) program for the British that at one time was planned to cover 11 logistics ships at a cost of around 2.5 billion pounds.

Oilers, fleet solid support ships and sea-based logistics vessels were all part of a program that got underway as far back as 2002 to revitalize RFA capabilities beginning in 2011.

A spokeswoman for the Ministry of Defence said that fleet solid support ships continued to be part of the MARS program.

“A way forward for the solid support ships will be announced in due course,” she said.

The original requirement for six oilers was reduced to four at the time of the British government’s 2010 strategic defense and security review, in line with heavy cuts to the Royal Navy’s fleet of surface warships.

The MARS ships will replace old, single-hulled oilers, and the new vessels will join two existing Wave-class double-hulled fleet tankers that meet International Maritime Organisation pollution regulations.

The deal gives BMT Defence Services “a massive boost in further proving our design and engineering expertise. ... The global market for auxiliary vessels will remain strong over the next couple of decades, and the selection of our Aegir design puts Britain in pole position for championing our design and know-how around the world,” said Managing Director Muir Macdonald.

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