Rolls-Royce eyes £1bn Navy order

ROLLS-ROYCE Marine is in pole position to win a £1 billion order for engines and electrical power systems for the Royal Navy's two giant aircraft carriers.

The Derby-based engine giant, headed by chief executive John Rose, has taken a significant step towards winning the giant order by acquiring Vosper Thornycroft's highly rated controls business (VTC).

UK industrial sources told Financial Mail that Rolls-Royce will announce within the next two weeks that it has bought VTC, based in Portsmouth, for about £15 million. The acquisition gives Rolls-Royce the expertise to provide state-of-the-art electrical power systems for the 60,000-tonne carriers.

Industry experts reckon the VTC product is superior to a system offered by French engineer Alstom. The VT Group is also expected to be given part of the giant carrier order which is being project managed by BAE Systems.

Rolls-Royce already knows it will be awarded the £300 million contract for the carrier's gas turbine engines and their maintenance, but it is also keen to provide the sophisticated electrical systems to power the carriers. These systems are reckoned to be worth around £300 million for each carrier.

Until now, Rolls-Royce has not had the necessary expertise in this area to win this contract against strong French competition. But by buying VTC, Rolls-Royce has acquired a world leader in the specialised field of electrical systems.

It is also able to take advantage of growing doubts about how Alstom's £3.2 billion debt will affect its ability to deliver the systems.

The two carriers will be Britain's biggest-ever warships, capable of carrying 40 planes each. The sophisticated systems built into them will be capable of commanding armies from miles off an enemy coastline.

The contract is expected to create about 2,000 jobs and secure a further 10,000 at UK shipyards.