BAe MoD deal comes out of the shadows

Aerospace firm admits Nimrod contract with missile deal soon

British Aerospace this week revealed that it signed a £1.85bn contract with the MoD last November for its Nimrod 2000 maritime patrol aircraft. It claims it is also close to signing a contract for the Storm Shadow missile.

Nimrod 2000 was chosen for the RAF’s replacement maritime patrol aircraft requirement last July. BAe has only now publicly confirmed the agreement, even though last month some City analysts were told the deal had been done.

Still outstanding is a contract for the Storm Shadow, the conventionally armed stand-off missile, for which BAe was also selected last July. This week BAe said a Storm Shadow contract was about to be signed.

A BAe spokesman said the company was in discussions with GEC-Marconi over what part it will play in Nimrod 2000. GEC-Marconi was the mission system supplier to the unsuccessful Orion 2000 maritime patrol aircraft bid.

In a last minute deal engineered by deputy prime minister Michael Heseltine, GEC was brought into the Nimrod 2000 project for political reasons.

Last July it was claimed that this work might be worth £200m to GEC-Marconi, but this week a defence industry consultant said BAe was still unhappy over the price of the equipment.

GEC-Marconi said it `has been working closely with BAe to achieve a satisfactory conclusion’ to talks over its role in Nimrod 2000.

A personnel executive close to BAe’s Nimrod 2000 subcontractors suggested BAe may not have confirmed the main contract’s signature until now because of outstanding talks with some of these firms.

He said contractors have only performed preliminary design studies on their parts of the project.