My right honourable friend the Minister of State for the Armed Forces (Bob Ainsworth) has made the following Written Ministerial Statement.

I am announcing today the award of a contract to Agusta Westland for implementation phase 2 of the Sea King integrated operational support (SKIOS IP2) programme. This programme will maintain availability levels and reduce costs for each of the five variants of Sea King helicopter operated by the RN and the RAF.

This is part of the wider defence logistics transformation programme to improve the effectiveness and efficiency of military logistics support to the front line. The contract builds on existing SKIOS arrangements and the support arrangements piloted on other MoD helicopters. It is worth around £470 million over the first five years, with a price review thereafter, and transfers to industry further responsibility for Sea King and component maintenance. The contract is forecast to deliver savings in the region of £90 million over 12 years against current support arrangements without any reduction of capability. These savings are in addition to the savings already achieved under implementation phase 1 of the programme, awarded in April 2005, which provides technical and spares support services. Implementation of phase 2 also transfers to industry approximately 300 of military and civilian posts that currently provide flight line engineering and logistics support at Royal Navy and Royal Air Force Search and Rescue (SAR) bases in the UK and Falkland Islands. The contract represents another deliverable of the helicopter plans set out in the defence industrial strategy, strengthens the partnered relationship with industry, and maintains aircraft availability levels but with reduced through-life costs. Overall, it provides better value for money for the taxpayer.