Arguments that have erupted between the three shareholders in a joint venture could hold up a £1.5bn military communications programme which is already six years late.
Disagreement has broken out between – Racal Electronics, Siemens Plessey Systems and US firm ITT Defence – over the increasing dominance of ITT in the group designed to build the Army’s Bowman radio system.
The latest arguments, over the supplier of core equipment in the £1.5bn Bowman system, have further delayed the official start of Archer Communications, the consortium formed to fulfil the contract.
‘There has been squabbling about the major supplier of the VHF radio,’ said an industry source. ‘We are in danger of the in-service date not being met.’
ITT, with a 40% stake is the largest shareholder and has made John Crane, its UK managing director, as the Archer managing director. ITT is now believed to have got its equipment selected for the core radio system.
Disputes have delayed the formal launch of the consortium and threaten to hold up manufacture of the system.
Archer was formed as a joint venture last year when rival bids by ITT Defence and Racal with Siemens joined forces.
Since the MoD’s acceptance of the consortium in March, negotiations between the parties have decided the shareholdings: 40% for ITT and 30% each for Racal and Siemens Plessey.
Negotiations have earmarked Siemens’ factory in Ilford to manufacture the equipment.