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New UK Defense Agency to Oversee Nuclear Missile Subs Construction

December 21, 2016 (Photo Credit: British Royal Navy)
LONDON - A new British Ministry of Defence agency being set up to oversee the construction of a fleet of nuclear missile submarines for the Royal Navy will start operations next April with ex-railway construction boss Robert Holden named as the interim chairman.

In an annual update to Parliament on progress with Britain’s £31 billion (US $38.4 billion) nuclear deterrent program, Defence Secretary Michael Fallon said that subject to formal approval staff currently employed on the project at the Defence Equipment & Support (DE&S) organization will start moving across to the new executive agency from April 1.

“The new body will undergo a process of transformation and be optimized for submarine delivery and support under the leadership of a new CEO that MoD now intends to recruit. To assist in the process of establishing the body, Robert Holden  has been appointed as interim chairman,” Fallon told lawmakers in a report Dec. 20.

Holden’s LinkedIn entry describes him as holding a number of non-executive and consultancy roles.

His assignments in the UK cover some of the nation’s largest infrastructure programs, including work on High Speed 1 and High Speed 2 rail programs. He was also chairman of Crossrail, a major project involving the construction of a new rail line across London.

The executive has also worked on projects associated with the Royal Navy Type 26 frigate and Queen Elizabeth aircraft carrier programs and has been involved in several aspects of the nuclear industry, including in his early career working at what is now BAE Systems submarine yard in northwest England.

The new organization being set-up by Holden  is a key part in the government’s effort to replace the Vanguard-class submarines currently providing Britain’s nuclear deterrence. Its creation follows Fallon’s 2015 warning to industry and others not to repeat the delays and cost overruns of the Astute hunter-killer program when it builds the new Trident missile submarines.

“Our new ballistic missile submarines cannot be late. There cannot be any threat to the build times, overrunning costs or any other excuses,” he said during a speech at an industry briefing to lawmakers and others on the  nuclear deterrent program.

In a Dec. 20 letter to staff, Tony Douglas, the CEO at DE&S, said the “ step forms part of the Government’s undertaking to strengthen the nuclear enterprise and recognizes the unique scale, complexity and importance of this national endeavour. Our vision is to create an organisation with the authority and freedom to recruit and retain the best people to manage the submarine enterprise and to ensure continued delivery of our critical submarine capability.”

The move will result in the DE&S maritime procurement and support operation being split, with staff in the submarines sector being hived off to the new organization with surface ships staying were they are. 

Mandated by the 2015 strategic defense and security review, the new submarine procurement and support agency is one of several initiatives by the government to try to avoid cost overruns and delays in the construction of the four Dreadnought-class Trident missile submarines scheduled to be built at BAE’s Barrow-in-Furness yard.  

 An overarching organization led by a director general has also been created to be responsible for all aspects of the defense nuclear effort across submarines and warheads, from procurement through to disposal.The MoD failed to find a suitable candidate for the director general role when it initially advertised the position earlier this year. The post has been filled on an interim basis as Permanent Secretary Stephen Lovegrove has another go at getting the right person for the job. An appointment is expected to be announced in early 2017 with the 175 strong organization scheduled to be fully operational in April.  

Douglas said in his letter to staff that the government was also developing proposals to deliver the Dreadnoughts, previously known as the Successor program, using an MoD/BAE/Rolls-Royce industry alliance arrangement similar to the BAE-led scheme used to build the two 70,000 tonne aircraft carriers.

BAE will assemble the 16 modular units that will go to make up the four Dreadnought’s while Rolls-Royce is developing and producing a new nuclear raising plant known as PWR3.

The government triggered the start of the Dreadnought program in September when it awarded demonstration and manufacture phase with contracts worth £986 million ($1.22 billion) for manufacturing and a further £277 million ($343 million) for the continuation  of design work.


On top of the estimated £31 billion ($38 billion) cost of the program out to 2035, the MoD has also set aside a £10 billion ($12 billion) contingency fund in case of cost overruns.
 
Aside from spending on the submarine the MoD is also making major investments expanding BAE’s submarine building infrastructure and improving facilities at the Royal Navy’s Faslane nuclear submarine operating base in Scotland.

The MoD makes no mention in the report of the operational start date for the first of the new Dreadnoughts but has previously said it will be ready sometime in the early 2030s.

The progress update to Parliament said the design had progressed well, with 70 percent of spatial arrangements now complete. Overall, the functional design program has been largely completed with £2.53 billion ($3.13 billion) of the £3.9 billion ($4.83 billion) allocated for the assessment phase having already been spent, said the report.

Some of that money has gone to purchasing long-lead items for the first two submarines.

Apart from the increasing level of Dreadnought work, BAE is roughly halfway through a program to build seven nuclear powered Astute-class hunter/killer nuclear boats for the Royal Navy.

 

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