Rolls-Royce gets £60 million navy engine support contracts

Nearly 50 naval vessels from four countries are to have their engines serviced by Rolls-Royce in deals worth £60 million - reflecting the company's growing role as a service provider.

Rolls-Royce has won two Ministry of Defence contracts. The company has won a £40 million five-year contract, with an option for an additional two years, to service Tyne and Olympus engines which power 37 Royal Navy, Royal Netherlands Navy, French and Belgian Navy vessels. Vickers Specialist Engines, part of Rolls-Royce, has also won a £20 million contract to support Deltic engines for the Royal Navy's 11 Hunt class vessels.

Saul Lanyado, President - Marine for Rolls-Royce said: "These contracts are good examples of our growing role as a service provider. Customers increasingly require comprehensive service packages which improve efficiency and drive down costs. Rolls-Royce can provide workload management skills and extensive knowledge of the product to do this."

The Tyne and Olympus contract will, by 2006, significantly reduce inventory costs for the Ministry of Defence as spare parts provision progressively transfers to Rolls-Royce. The Ministry will then only pay for spare parts as they are used, while Rolls-Royce manages parts procurement and the return of engines to serviceable condition.

Olympus engines will be serviced and repaired at the Rolls-Royce facility at Ansty, near Coventry. The site will also service and repair Tyne engines in a programme that will be equally shared under a sub-contract with the Defence Aviation Repair Agency (DARA).

The Vickers Specialist Engines contract has two phases. The first covers repair and overhaul of the engines and associated spares for three years. The second covers provision of power for Deltic engines managed by Vickers Specialist Engines. The business, based in Crewe, already supports Royal Navy equipment, including Hunt and Sandown class generator sets.

Mike Botley, Ministry of Defence Marine Propulsion Systems Team Leader, said: "The Defence Logistics Organisation has a testing strategic goal which aims to improve the overall cost effectiveness of support, and these contracts will contribute in delivering significant savings."

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