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16 Dec 03. The Times reported that the U.K. Ministry of Defence has delivered a clear vote of no confidence in BAE Systems after appointing independent advisers to oversee the company’s construction of two new aircraft carriers. Mike Turner, BAE’s chief executive, was said to be furious at the news that Amec, the construction and project management company, has been drafted in as the MoD’s private advisers on the £3 billion project.

The move is a big embarrassment for BAE, undermining its role as prime contractor on the prestigious contract and implying that the MoD has doubts about the company’s ability to deliver the programme on time and within budget.

According to one source: “The MoD has decided it cannot rely on BAE, and so has decided to bring in another party (Amec) to sit on BAE’s shoulder.” BAE said: “It is our understanding that Amec’s precise role has not been agreed. We still have many questions about why Amec may be brought in.

“As prime contractor we would ask: how is this going to work. Mike (Turner) is not overwhelmingly enthusiastic.” BAE warned that Amec’s involvement could delay the carrier’s timetable.

Amec, with a £5 billion turnover, is an international project management company with extensive experience in the oil, gas and transport sectors. Its chief executive, Sir Peter Mason, is a non-executive director at BAE. A spokesman at BAE said: “Any annoyance we might feel is not directed at Amec personally.” BAE and Thales have still to decide the final design and construction timetable of the vessels. This is not expected until about May next year.

BAE said: “We thought we had a clear understanding over our position. Now the MoD want to play a deeper role, but bringing someone else to the table may not help.”

The vessels, which will be the largest carriers outside of America, may have to be shortened, have their weight reduced to about 50,000 tonnes, and carry fewer aircraft. Amec is expected to immediately review those plans on behalf of the MoD.

The carriers will be built in separate sections at shipyards around Britain before being assembled at Roysth, Scotland. It is possible that Amec could oversee that work, which would go to the heart of BAE’s role in the project.

Comment: Whilst BAE may appear to be throwing its toys out of the cot over this one, I am sure there are people within the company breathing a huge sigh of relief. To weld together differing hull sections from different yards, using different work practices, is a nightmare in itself which requires a huge skill in general project management at which Amec excels. BAE has enough on its plate with Type 45, Astute and the carrier work it has; this type of work requires a specialist fabrication consultant, Amec won its spurs in the North Sea, something the MoD has obviously recognised.

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