Halliburton unit Kellogg Brown Root was chosen by Britain on Monday to coordinate construction of two aircraft carriers worth £2.9bn ($5.4bn) that will be the Royal Navy’s largest ships.
“I am pleased to confirm the selection of Kellogg Brown Root Limited (KBR) as the preferred physical integrator of the future aircraft carrier project,” Defence Secretary Geoff Hoon told parliament. Britain’s largest defence firm, BAE Systems, was initially
tapped to lead the project but the ministry has instead opted for a committee of firms and the MoD jointly sharing risk.
Because the work will be spread across firms and shipyards up and down the UK, the MoD wants outsider KBR to coordinate the project.
That approach had sparked concern among British shipbuilders who feared KBR might funnel work to a Scottish shipyard which it is affiliated with and which is not among those lined up to build the carriers.
The MoD and BAE held weekend talks aimed at heading off a showdown between the two sides, industry officials said.
“There has been positive progress. It looks as though peace has broken out,” an industry source told Reuters on Sunday, adding that the MoD had agreed to limit KBR’s powers.
KBR has stirred even larger controversy in the United States as logistical support it provides to U.S. troops in Iraq has sparked a fight over cost estimates with the army, which threatened to withhold partial payment until a breakthrough reached last week.
Formerly headed by U.S. Vice President Dick Cheney, parent firm Halliburton showed Iraq-related revenue of about $1.7bn and $13m of operating profit in its most recent quarterly results.
The MoD hopes to have the two aircraft carriers delivered in 2012 and 2015.
French firm Thales will lead their design while BAE Systems and VT Group are expected to take key roles as well.
