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Ship Sales

Volume 453: debated on Monday 27 November 2006

To ask the Secretary of State for Defence what capital receipts his Department received from the sale of HMS London and HMS Coventry to BAe; how much they were sold for to the Government of Romania; whether his Department benefited from a sell-on clause; and if he will make a statement. (101444)

HMS London and HMS Coventry were sold to Romania under a Government-to-Government agreement for a combined purchase price of £116 million. The agreement covered their purchase and regeneration under a “back-to-back” contract between MOD and BAE Systems. The purchase price for the vessels under this agreement was £100,000 each. This figure represented the scrap value of the hulls and reflects the fact that the ships had been decommissioned for some time and required major regeneration work.

In total, the MOD received between £1.5 million and £2 million, including the £200,000 for the two hulls, the rest of the money being for the provision of services on a repayment basis.