December’s top 10 contract wins in engineering

Each month, The Engineer picks 10 of the most notable news stories from our Business Briefs archive. December was a good month for the UK technology, construction and defence industries, seeing companies creating new jobs and winning multi-million-pound contracts from overseas.

One of the most-read business stories last month was the announcement that Caterpillar’s Building Construction Products division is investing £50m in its UK manufacturing facilities for new products and expanded production facilities in Leicestershire and Stoke-on-Tees.

This followed hot on the heels of the company’s promise to create 300 permanent jobs across the East Midlands and North East. Business minister Mark Prisk said: ‘It’s manufacturers such as Caterpillar and its UK supply chain that will help us rebalance the economy, create jobs and encourage sustainable economic growth that benefits the whole country.’ Caterpillar’s UK manufacturing division has increased its workforce by more than 70 per cent since 2010.

In the technology sector, a number of UK companies received investment from external sources. Flow-battery technology developer Red-T received a €900,000 (£756,000) investment led by the AIB Seed Capital Fund managed by Dublin BIC. The syndicated investment comprises co-investment by the AIB Seed Capital Fund, Enterprise Ireland and the chief executive of Red-T.

Red-T is headquartered in Clontarf, Dublin, and has an R&D facility in Reading, England. The company’s technology is a Vanadium-based flow battery that is claimed to enable the cheap and efficient storage of electrical energy in liquid form.

Edinburgh-based technology developer Adrok, meanwhile, received an investment of more than £3m from client Teck Resources, a Canada-based diversified resource company focused on responsible mining and mineral development, with major business units focused on copper, steel making, coal, zinc and energy.

Adrok’s Atomic Dielectric Resonance (ADR) technology provides data on and the locations of subsurface hydrocarbons and minerals prior to costly drilling programmes. The arrangement with Teck will allow the company to expand its commercial and technological expertise and is expected to create up to 10 new jobs.

Another UK company to gain business from overseas was British Water, which signed an agreement with Israeli industrial R&D agency MATIMOPto enable the water industries of each country to collaborate more closely on tenders and research projects.

The Memorandum of Understanding (MoU) sets up a framework for the organisations to work together on a range of areas of common interest, including water management technology, water reuse and the use of renewable energy sources in water purification, reclamation and desalination.

The MoU will also facilitate greater joint projects targeted at developing new product applications and processes to be commercialised in the global market. According to British Water, Israel’s scarcity of water has led to the development of several novel water technologies that are gaining recognition internationally as concerns about water scarcity increase in other countries.

BAE Systems headed two of the month’s most-read business stories. The first concerned a £16m contract to restore HMS Victory, the oldest commissioned warship in the world, at Portsmouth Historic Dockyard.

Since July, the company’s engineers have been undertaking vital maintenance work to prepare the ship for the next phase of the renovation project and have removed the upper sections of the vessel’s three masts, as well as the booms, yards, spars and associated rigging. The five-year contract, with an additional five-year option, will allow a detailed schedule of work to begin, including the installation of a fire-suppression system on the 246-year-old vessel.

The second contract, worth £40m, came from the UK Ministry of Defence (MoD) for combat air systems. This four-year Future Combat Air System (FCAS) focused research contract was signed with the aim of sustaining and developing the UK’s technology and skills in this field.

BAE Systems will inform the MoD’s unmanned air system strategy over coming decades to ensure that the best use is made of new technologies. Currently, the vast majority of unmanned aircraft flying is surveillance and reconnaissance in support of frontline troops in Afghanistan.

Across the pond, the US Department for Defense selected defence and security company Qinetiq to provide key training and simulation services for the Naval Air Warfare Centre Training Systems Division’s (NAWCTSD) training systems, as part of a group of 28 companies providing training and simulation services to the US Navy.

Training Systems Contract III (TSC) is a group of multiple-award, indefinite-delivery, indefinite-quantity (IDIQ) contracts intended to provide the US Naval Air Systems Command Team with a streamlined, quick-reaction vehicle for the acquisition and support of training systems. Inclusive of all awarded packages and ordering periods across all the 28 participating companies, the contract is worth a total of $2bn (£1.3bn) over the base ordering period of five years, with two one-year optional ordering periods.

British institution Rolls-Royce also won two notable contracts in December. One saw the power systems company secure a £10m contract to design and equip two offshore supply vessels for shipowner Gulf Offshore North Sea. The two UT755 XL designs will be built at the Rosetti Marino shipyard in Ravenna, Italy, with expected delivery in 2013 and 2014.

Rolls-Royce will also provide a propulsion system for each vessel, including propellers and thrusters, along with deck machinery, bulk handling equipment and a ship automation package. When this order is delivered, Rosetti Marino will have constructed 10 Rolls-Royce UT vessels.

In addition, a €250m (£209.6m) contract with French conglomerate Areva will see Rolls-Royce supply safety instrumentation and control (I&C) technologies and systems for the French nuclear reactor modernisation programme. The systems will be installed in the French fleet of 20 1,300MW nuclear reactors, operated by utility company Electricité de France (EDF).

The project will ensure the reactor fleet continues to meet safety and licensing requirements through deployment of the latest I&C technologies, systems and components provided by Rolls-Royce. It is being carried out by Areva as part of the third round of 10-yearly planned reactor outages managed by EDF.

Elsewhere, EDF signed a partnership agreement with US company GE Energy to co-develop the first next-generation combined-cycle gas turbine (CCGT) featuring GE Energy’s FlexEfficiency 50 technology. This combined-cycle gas turbine, due to begin production in 2015, will have an installed capacity of 510MW — enough to provide electricity to an equivalent of 600,000 French households.