Wednesday, 22 February 2012

The chances of life on MARS were a million to one, yet somehow its come…



Humphrey was absolutely delighted today to read that the long awaited order for 4 new replenishment tankers has been given to Daewoo. This project has had a long gestation, and gone through multiple revisions, changes, reductions and even recently it was looking as though less than 4 vessels were to be ordered.

The MARS project has long confirmed to this author that to many, logistics are not sexy, cool, nor a useful source of allocating scarce planning round funding. The project has repeatedly been delayed, and has put the UKs maritime strategy at risk through the possibility of life expiry of existing tankers. The news that the four new tankers have been ordered is genuinely a very good news day for the RN.

 On initial examination, it appears that the RN has secured an absolute bargain – Four large (37,000 tonne) tankers for barely £400 million is a genuine result. These ships will be vastly more capable than their predecessors, and mark a shift away from the previous ‘three tier’ tanker strategy of fleet tankers, light fleets and support tankers, which in itself necessitated some complex programming and running of multiple supply chains to keep ships going. Instead the RN is essentially ending up with six large tankers, each of which will be able to do a range of roles, and by the looks of things provide wider military functionality as well. This is absolutely brilliant news for the RN, and this author is sure that there will be real delight in the RFA and RN at the news of fleet regeneration finally going ahead.

 The project also serves as a wider wakeup call to British industry – the days of the UK Government placing orders for warships with UK yards should no longer be taken as a given. That these ships have been ordered from Korea not only bolsters our relationship with the far east, but also sends a shot across the bows. In future, if the price is not right, then the contract will not go to the UK yards. Although BAE did not bid for the final project, this will definitely be of concern to them – why invest in shipyards when the UK government shows no inclination to order from these yards? This order appears to be the first visible manifestation of the new defence industrial strategy, in which orders will go to the best bidder, not the British bidder.

 Finally, the author must note with resigned frustration the utter hypocrisy of the Opposition attacking the award of this contract to a foreign shipyard. When the current Opposition were in power, they were responsible for launching the competition and going to external bids in the first place – to claim otherwise is just plain denial and politics at its most hypocritical.

 Let that not detract from a very good news day for the RN though – this coupled with the deployment of the T45s, and rumours of funding confirmation for T26 means that the RN regeneration programme continues, and that by investing in this capability, the RN is now moving forwards to a much brighter future.

11 comments:

  1. Agree with comment ref ordering from overseas yard but there's a difference between ordering fleet tankers (pretty standard engineering, for all that the boys and girls in Portsmouth will no doubt add to them once they get them) and high-tech end warships. Do we need the skill set for the first just for the sake of it? Probably not. Do we need the second? Probably. So maintain the skill base ordering the second (T45, CVF, T26 etc) and order overseas to get the best value with the rest.

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  2. Ordering MARS overseas makes perfect sense if the price was right. However I'm not surprised that the usual knee-jerk reaction against the order has happened.
    What will be a real wake-up call to British shipyards will be if the order comes in on time and close to budget.

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  3. Agreed. Fantastic news for RFA and RN. However, I'm pretty sure BAES will be relatively unconcerned on this one, particularly as they appear to be getting a £90M bung to provide "engineering support" to DSME. Personally, I can't conceive of how one might spend 90 man years providing "engineering support" to a company that churns out much more complex ships on a monthly basis. Applying the Defstans and generating Log Suppt documentation doesn't cost that much.

    If only it hadn't taken over eight years of PR-torture to get here. It shouldn't have taken five years to work out that :
    1.UK design and build was unaffordable
    2.There wasn't a commercial off-the-shelf option available, so
    3. You get a competent company to produce a design to the requirement and then get a competent merchant shipbuilder (none in UK since 1993) to build it.

    MoD still doesn't understand shipbuilding costs. The going rate for a commercial product carrier is around $US70M - even with higher speed, much more accommodation, flight deck and hangar we shouldn't be paying much more than $US110M (£70M) per hull, but it's vastly better than the price for the two Wave-class ten years ago!

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  4. Makes perfect sense to go with a yard that has a world class reputation for being on time and budget. Hope the MoD don't try and tinker with the spec though!

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  5. Spot on Sir Humphrey,

    Opening up to foreign competition is the way ahead. It has worked wonders for the coal industry, who have really sharpened their picks. And the steel industry as well.

    What is really interesting is the inevitable tension such a policy would bring with our new bessy friends the French, who it has to be said do not adopt such a policy.

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  6. Actually, thinking it through, perhaps our 2* in Washington could condescendingly tell the Americans what a good thing it is and they are bound to open up their Defence market a bit more?

    After all, he's a 2 star...

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  7. Of course, the comments above conveniently ignore the fact that firstly BAE was offered the chance to bid on a sole contractor basis for the vessels, and still turned the job down.

    It also ignores the reality that the UK shipbuilding community is at maximum capacity relative to the outputs the Govt has said it is able to fund for the next 10 years, so if the ships had been built at home, something else would have had to have given in the UK building programme.

    The final point worth remembering is that a tanker is actually a fairly simple ship to build - the importance from a strategic perspective is keeping the ability to design the vessels intact. These vessels have been designed by a British firm, and that has kept the key high end skills in work - and also ensured that our sovereign warship building capability (and remember a warship is very different from a tanker) intact, and able to turn out vessels / parts of CVF for the next few years.

    Yes in an ideal world we'd have built them at home - but the UK shipbuilding industry had the chance, and chose not to take it.

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  8. An excellent decision. The Koreans build good ships at a sharp price, and they will be delivered on time to boot. It would be great to have some imaginative thinking on how to replace some of the other RFAs, e.g. Argus. There is the potential to acquire some really capable multi-purpose vessels at a very reasonable cost.

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  9. Fatuous comments such as the following, are a symbol of everything that has gone wrong with this country since the war:

    The project also serves as a wider wakeup call to British industry – the days of the UK Government placing orders for warships with UK yards should no longer be taken as a given.

    If this logic is followed why not outsource the armed forces themselves, if it saves 'us' money?

    This is the real root of the Thatcherite world view, the only values are monetary. The fact that those who actually pay for these ships with their taxes and are presumably protected by them, are looked on as temporary hired labour by those who sign the cheques, speaks volumes.

    The EU laws and other globalist corporate treachery must be thrown in the bin of history. Looked on as another failed utopian idea. We need a return to the true definition of nation and it's interest that has sadly been subverted by 70 years of fake democracy.

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  10. So all who made the comments above (with the worthy exception of cavist), including I am sad to say Sir Humphrey. How do you feel today, following the loss of 1775 shipbuilding jobs in this country!!!! Try asking them if they thought it was a good use of Tax Payers money to place the contract overseas!

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