BAE Systems to arm troops in 15-year £3 billion contract

ARMS giant BAE Systems has signed a 15-year deal with the Ministry of Defence to supply ammunition to British troops, it was announced today.

Defence officials said the contract, which is worth up to £3 billion, will ensure frontline forces have a secure supply of bullets.

The long-term agreement will also allow BAE to carry out much-needed modernisation work on munitions factories in the UK, some of which are relying on machinery dating back to the Second World War.

The deal will safeguard 1700 jobs at the firm's plants in Birtley, County Durham, Glascoed, South Wales, and Radway Green in Crewe.

A £120 million investment programme at the three sites will improve efficiency and make the facilities safer.

Under the arrangement, the firm will supply around 80 per cent of the ammunition used by the military for operations and training, from 5.56mm bullets for the SA80 rifle to mortar rounds and artillery shells.

Armed Forces Minister Bob Ainsworth said:

"It is absolutely essential to the conduct of operations and training that we have a guaranteed UK-based high quality source of ammunition."