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UK MoD Considers Outsourcing Royal Auxiliary Fleet

18 January 2010

The UK Ministry of Defence (MoD) is considering leasing, chartering or even converting second-hand ships from private companies to fulfil the needs of the Royal Fleet Auxiliary (RFA) fleet in an effort to save money.

The MoD had looked to buy six new refuelling tankers for the RFA as part of a programme called Mars, but have changed course after around 20 companies showed an interest in participating in the part-privatisation of the RFA, also known as the Merchant Navy.

The outsourcing could go ahead as part of a review into the RFA fleet or could be introduced solely for the six new refuelling tankers the MoD had initially planned to purchase.

According to shipping industry experts, outsourcing the fleet management could save tens of millions of pounds for the MoD, which is under pressure to cut its budget.

Some companies have expressed an interest in supplying ships as a private finance initiative similar to contracts already issued by the MoD for its air-refuelling fleet and military satellite communications.

BAE Systems, in collaboration with South Korean industrial conglomerate Daewoo, are expected to submit their proposal for the construction of the vessels.