Rolls-Royce banks $11B Deal to power UK Nuclear Subs
Britain said on Friday it had awarded Rolls-Royce RR.L a $11 billion eight-year contract to design, make and support the nuclear reactors that power its fleet of submarines, amid U.S. calls for higher defence spending.
The deal will strengthen the Royal Navy's continuous at-sea deterrent - under which at least one nuclear-armed ballistic missile submarine patrols the seas at all times - while also boosting the AUKUS defence pact with the United States and Australia, Britain's Ministry of Defence (MOD) said.
Amid rising tensions with Russia, highlighted by what Britain said was a Russian spy ship in UK waters earlier this week, the UK government has said it will increase defence spending to 2.5% of GDP but has not provided a timeline.
The defence industry is awaiting more details on the route to the 2.5% spending level from the government's Strategic Defence Review, which defence minister John Healey said on Friday was still due to be published in the spring, following speculation it could be delayed.
Healey said the contract with Rolls-Royce, which also makes engines for aircraft, would save Britain 400 million pounds over eight years by combining multiple contracts into one.
"It's a boost to British jobs, British business. It's a boost to our nuclear deterrent," he told Sky News.
The new contract, called Unity, will also support work on the Dreadnought class of nuclear submarines which are currently being built by BAE Systems.
(Reuters)