Fincantieri and Daewoo Shipbuilding and Marine Engineering (DSME) have reportedly withdrawn from the competition to build three new UK support vessels for the Royal Navy.
The companies were shortlisted along with three other firms for the £1bn contract by the Ministry of Defence (MoD) in December last year, the (FT) reported citing unnamed sources.
A Fincantieri spokesperson said: “As you know Fincantieri withdrew from Fleet Solid Support Vessels Tender in mid-April for a number of considerations. However, the UK MOD asked us to consider a new set of information that is going to provided in the coming days. Fincantieri is waiting for such a document that will be carefully considered”.
Other bidders for the contract include Spain’s Navantia, Japan Marine United and a consortium of UK companies referred to as ‘Team UK’, which comprises BAE Systems, Babcock International, Cammell Laird, and Rolls-Royce.
The publication went on to add that Team UK members are engaged in talks to discuss whether the consortium should stay in the competition.
If the reports are to be believed, then it could deal a significant blow to the UK support vessels contract.
However, another source played down fears that Team UK might pull out.
According to the FT, bidders are required to put in ‘significant’ funding in advance under the terms of the competition.
The competition has been facing criticism from within the UK over bringing in international firms to participate in the tender.
The criticism arises from the argument that awarding the contract to foreign players would remove the opportunity for the UK shipbuilding industry to create a sizable number of jobs, as well as revenues for the government.
Trade union GMB national officer and Confederation of Shipbuilding and Engineering Unions chair Ross Murdoch said: “We have a highly skilled shipbuilding workforce in the UK that is more than capable of making these ships at a fair market price.
“We can’t let our proud shipbuilding tradition be sold down the river if the work goes to artificially subsidised international competitor shipyards instead.
“In a year which has seen Appledore close and hundreds of jobs shed at Rosyth Cammell Laird, this is an easy way to keep Britain’s shipbuilding industry afloat.”
However, the MoD has been driving home the point that it is legally bound to procure the ships through an open international tender.
Under the Fleet Solid Stores (FSS) ship programme, the MoD intends to purchase three vessels that will be operated by the Royal Fleet Auxiliary (RFA).
The UK support vessels are expected to replace the RFA’s existing Fort Austin, Fort Rosalie, and Fort Victoria ships.
The MoD expects a final decision on the winning bidder to be made in 2020, while the ships are likely to come into service with the RFA from 2026 onwards.