My honourable friend the Parliamentary Under-Secretary of State for Defence (Quentin Davies) has made the following Written Ministerial Statement.

I wish to inform the House that my department is extending our PFI contract with Paradigm, a wholly owned subsidiary of EADS, to enable the communications satellite, Skynet 5D, to be completed and launched. The Skynet 5 constellation provides the communication capability vital to the success of our military operations. Skynet 5D is partially built and was originally designated as a back-up option should any Skynet 5 satellite fail to perform as required. Recent work has demonstrated that the current capability of the Skynet 5 constellation (Skynet 5A, B and C) will be exceeded by around the middle of this decade. Skynet 5D will be launched in 2013 to meet an anticipated increase in demand for communications bandwidth between 2015 and 2020.

The deal with Paradigm will increase the value of the PFI contract by over £400 million to about £3.5 billion. As well as securing essential military capability, it will also directly create around 100 new jobs, mainly at EADS Astrium/Paradigm sites in Portsmouth and Stevenage and sustain a large number at both sites and also in Corsham, Wiltshire.