Serco is Selected as Preferred Bidder for £1bn MoD Contract

Towage and other marine services will be updated under a new MOD contract with Serco. Towage and other marine services will be updated under a new MOD contract with Serco.
Industry Database

A joint venture led by Serco Group plc (Serco) has been selected as preferred bidder by the UK Ministry of Defence (MoD) for the Future Provision of Marine Services contract.

The 15 year contract is valued at £1bn and will be fulfilled by Serco Denholm Limited, a 90:10 joint venture between Serco Limited and J&J Denholm.

Under the new contract the company will deliver marine support services at major UK Naval bases in Portsmouth, Devonport and the Clyde. Some work will also be relocated from Pembroke Dock to Burntisland on the Firth of Forth. The final contract is likely to be signed in the third quarter of this year.

Services provided under the new contract will include the provision of tugs and pilot boats for naval ships, passenger transfer to and from ships, loading stores and removal of waste from MOD ships, environmental protection in the event of oil or other spillages, provision and maintenance of buoys and moorings, support to deep water training services, and marine support to the Kyle of Lochalsh BUTEC ranges.

Serco Denholm has provided similar but less extensive services to the Royal Navy since 1996. Under this new provision the joint venture will manage, operate and maintain approximately 110 vessels used in in-port and involved in deep water operations. Approximately 60 new vessels will be introduced into service through the lifetime of the contract.

Among the craft likely to be replaced are many of the rapidly ageing tugs built originally for the Royal Maritime Auxiliary Service and currently managed by Serco Denholm under the existing contract. With the need to replace this outdated tonnage in mind, the company has been conducting trials with various modern tugs of various designs for some time.

The Briggs Group will provide buoys and mooring support with new jobs and investment created at Burntisland on the Firth of Forth. As work transfers from Pembroke Dock, Serco Denholm has proposed a job creation and regeneration option for the Pembroke Dock site. Supported by the Welsh Development Agency and Milford Haven Port Authority, this is designed to help create new jobs in the area.

The market for support services in defence continues to grow and Serco has a strong track record. Serco provides similar marine services to the Royal Australian Navy through a joint venture with P&O Marine Services. Serco North America is also well placed to compete in this aspect of the US defence market, following its acquisition of RCI earlier in 2005.

Christopher Hyman, Chief Executive of Serco Group plc said, 'I am delighted that Serco's long term partnership with the MoD and the Royal Navy can develop further with this new award. The Royal Navy is world renowned for its professionalism and its readiness. Since 1996 Serco has supported the Navy in maintaining these high standards.

This is quite a flagship for our marine services capability, we help the Royal Navy put to sea. We are committed to working responsively and flexibly to anticipate and meet the needs of our clients.'

Serco is a leading international service company, operating in a broad range of sectors, including defence and aerospace, IT services, education, local government, transport, science, health, and justice.

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