18 Oct 18. The FT reported yesterday that Canada has chosen BAE Systems’ Type 26 design for next generation of warships. Canada’s next generation of warships will be built on a design by Britain’s BAE Systems after Ottawa selected an international consortium led by Lockheed Martin as its preferred bidder. The Canadian government said late on Friday that BAE’s Type 26 design had beaten two rival submissions in a competitive tender to provide replacements for the Royal Canadian navy’s frigate fleet. While a final contract award still has to be made the news marks a significant step forward in what is the largest and most expensive military purchase in Canadian history. The selection of the Lockheed Martin-led team marks the second overseas order for BAE’s Type 26 design. BAE in June won a multibillion-dollar contract to supply the Australian navy with nine of the 6,900 tonne multi-mission warships in a competitive tender. The victory was significant in part because work on the first Type 26 for the Royal Navy only started last year and the ship is not due to enter service until 2027. The potential Canadian contract is much smaller and would be a licensing agreement only for BAE. The ships will be built at Irving Shipbuilding of Halifax, Nova Scotia.
“These ships will form the backbone of our Royal Canadian Navy and will be Canada’s major surface component of maritime combat power for decades to come,” Public Services and Procurement Canada said in a statement on Friday. A contract award is expected this winter, the statement went on, “with construction beginning in early 2020”. Apart from BAE, the Lockheed consortium also includes CAE, L3 Technologies, MDA and Ultra Electronics. None of the companies was immediately available for comment. The team beat a rival submission from Alion Science and Technology which, along with its subsidiary Alion Canada, had submitted a proposal based on the Dutch De Zeven Provinciën Air Defence and Command (LCF) frigate. Navantia, a Spanish-based company, headed a team that included Saab and CEA Technologies. Its proposal was based on the F-105 frigate design, a ship in service with the Spanish navy. (Source: FT.com)
BATTLESPACE Comment: This is excellent news and builds on the success for the BAE Systems’ Type 26 design chosen by Australia and the UK. It has transformed the UK’s naval shipbuilding industry and will lead to other deals across the globe. Given this choice, the requirement for a separate Type 31e design may diminish, given the likely drop in list price for the UK’s Type 26 fleet given the increased volume in numbers. This may be a blow to Babcock which is hoping for the Type 31e bid to bolster its ailing naval division, particularly A&P, where the storm clouds are growing. There are rumours of a large increase to £1.3bn for the Astute Drydock which has to be built in 4 years and continuing stories of the need to increase the weight of the Faslane shiplift to accommodate the Dreadnaught boats. A number of City research papers suggest that Babcock’s profit forecast is under pressure resulting in a drop in the share price this week with more expected to come.