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Swan Hunter

Volume 228: debated on Thursday 8 July 1993

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To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Tynemouth (Mr. Trotter) of 2 July, Official Report, column 642, whether the Ministry of Defence will now be paying Swan Hunter more than the agreed successful tender for the work on the three Type 23 frigates.

We have agreed an incentivised arrangement with the receiver under which any cost under or overrun will be shared between the receiver and my Department on a pre-determined ratio subject to an upper cost ceiling, which does exceed the original contract price. It is too soon to say whether the original contract price will be exceeded.