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Volume 455: debated on Monday 8 January 2007

To ask the Secretary of State for Defence (1) what assessment his Department has made of the significance of (a) the flotation of KBR on the stock market and (b) delays which recently prevented DML from securing a shipbuilding contract for Appledore shipyard for KBR’s commitment to its UK defence interests; (106672)

(2) if he will review urgently the fitness of KBR to own and operate vital strategic defence and other installations in the United Kingdom;

(3) what assurances his Department has received from KBR that (a) the UK’s strategic interests and (b) the future of DML will be safeguarded now that Halliburton-KBR are separate commercial entities; and if he will make a statement;

(4) what assessment his Department has made of the possible effects of an independently owned KBR on (a) the UK’s strategic interests and (b) DML and its Appledore and Devonport facilities;

(5) what assessment his Department has made of the impact of KBR splitting from Halliburton on (a) the future carrier programme, (b) the Vanguard class submarine overhaul and the refit of HMS Victorious and (c) the ongoing naval base review; and if he will make a statement.

[holding answer 5 December 2006]: Devonport Royal Dockyard is a strategic asset that plays a direct role in maintaining the UK’s nuclear deterrent. The Government require assurance that any prospective change of ownership of Devonport Royal Dockyard Ltd (DRDL) or any new influence or control should not adversely affect the essential security interests of the UK. On this basis the Government need to assess whether the planned separation of KBR from Halliburton would be acceptable. MOD is now in active discussion with KBR to ensure that the UK’s essential security interests are protected. The ability for Devonport Management Ltd. to bid freely for defence contracts is a key element of these interests.

Other work which KBR currently conducts for MOD has not been directly impacted by the separation of KBR from Halliburton.

I understand that the recent contract which DML’s Appledore facility had been hoping to secure was for a commercial order.