Ministry of Defence in discussion with 'various companies'
Michael Ribbeck - Business Editor- firstname.lastname@example.org - Tuesday 20th March page 14
THE Ministry of Defence has re¬vealed it is talking to various com¬panies about the possible privatisation of its massive Abbey Wood centre.
Around 10,000 people work at the base in Filton which is responsible for sourcing and supplying equip¬ment for all three of Britain's armed forces.
The base is the largest MoD centre in the country and the Government has admitted it is taking a close look at the way it runs the operation.
As reported in the Evening Post hundreds of jobs are to be axed at the procurement headquarters as part of the Government's defence spending review. The review was carried out under the former defence minister and North Somerset MP Liam Fox.
But the cuts have still not gone far enough and the Government is looking at other ways of saving cash from an organisation which has an annual budget of £14 billion.
The base is the headquarters of the Defence Equipment and Support procurement organisation. It is respons¬ible for ordering everything from uniforms and soldiers' kit to fighter jets.
Its biggest project at the moment is overseeing the development of the two new super-carriers.
Major defence projects have come in for serious criticism in recent years for going massively over-budget. Liam Fox made it clear it was his main priority to get tough with defence firms.
The procurement organisation did 'have sites across the country; includ¬ing London and Bath, but all the staff will have moved to the Filton site by the middle of 2012.
According to reports the current Defence Secretary Philip Hammond has asked around 15 companies to take part-in a consultation on the future of the site.
There are three options on the table and the Government has been speak¬ing to defence companies, account¬ants and consultants about their plans.
The options include:
• Creating a trading fund which would be used to create a separate company.
• Abbey Wood could become a Non Executive Public Body or a Quango. .
• A government owned company.
Mr Hammond has been talking to various companies but the MoD is not giving a timetable on how long the process will take.
According to industry sources Mr Hammond has spoken to Serco and Babcock International. Both firms specialise in overseeing and man¬aging major engineering projects.
Major finance firms including De¬loitte and KPMG have also been con¬sulted along with the Bechtel Group and Fluor Corp.
BAE Systems, which owns Filton Airfield - and employs hundreds of staff in the Bristol area are also taking part in the talks.
Interview with Andrew Feinstein - author of the new book The Shadow World - Inside The Global Arms Trade (Penguin 2011)