BAE Systems is taking the Sultan of Brunei to court
BAE Systems, Britain's largest defence contractor, is taking the Sultan of Brunei, one of the world's richest men, to court over a $1bn dispute involving an order for three naval ships.
The dispute centres on a lucrative export order, estimated to be worth over £600m ($1.13bn), to build three offshore patrol vessels for the Royal Brunei armed forces.
The contract was agreed several years ago and BAE, headed by Mike Turner, the chief executive, launched the first ship to much fanfare in January 2001. The other two ships have since also been completed.However, all three remain moored at BAE's Scotstoun yard on the Clyde, as the Sultan has refused to accept them because they allegedly fail to meet his specifications.
"Anyone who flies over the Clyde can see the ships just sitting there, not doing much," said one executive last night.
Talks to resolve the dispute have been taking place for almost a year. It is understood that a date has now been set for the case to be heard at the International Court of Arbitration in Paris.
"We are currently in arbitration and consequently cannot discuss the issue," a spokesman for BAE confirmed last night.Senior defence industry executives believe that in this instance the deficiency may not lie in BAE's expertise at shipbuilding or flaws with the ships themselves. They believe the Bruneians may lack the correctly trained personnel needed to run the highly sophisticated vessels.The 95m long ships, which are equipped with Exocet and Sea Wolf missiles, are meant to be used for maritime policing, anti-aircraft, surface and submarine warfare, as well as naval gunfire support.
BAE has never disclosed the financial terms of the contract but industry analysts estimate that each ship would be worth well in excess of £200m, making the total contract worth over £600m.
Executives close to the process said last night that a formal resolution to the dispute could still be months away. However, arbitrated awards are not subject to appeal.
The Sultan is one of the world's absolute rulers. However, in his birthday speech last year he announced that he wanted to give Brunei's 350,000 people more say in the oil-rich country's affairs.
Brunei, on the north coast of Borneo, has one of the world's highest per capita incomes because of its oil and gas resources. No one was available for comment yesterday at the Brunei embassy in London.
------------------NAKHODA RAGAM CLASS OFFSHORE PATROL VESSELS, BRUNEI
The Nakhoda Ragam class of 1,940t offshore patrol vessels are being built for Brunei by BAE Systems. The first and second of class, Nakhoda Ragam and Bendahara Sakam, were launched in January and June 2001 at the Scotstoun shipyard of BAE Systems Marine. The launch of the third patrol vessel, the Jerambak, took place in June 2002. The Royal Brunei Navy will operate the ships from the Muara naval base.
The governments of UK and Brunei agreed a Memorandum of Understanding in 1994 on defence co-operation. Brunei issued a revised request for tenders (RFT) in 1995 for three offshore patrol vessels. In 1995 it was announced that BAE Systems (then GEC Shipbuilders) had been selected as the prime contractor.
The ship design is a new variant of the F2000 family. A high level of automation in the ship allows operation by a crew of 79. Accommodation is provided for the crew and an additional 24 personnel if required.
COMMAND AND CONTROL
The patrol vessel is equipped with the Nautis II command and weapons control system supplied by Alenia Marconi Systems. The Nautis II has multifunction consoles to support engagements against airborne, surface and submarine threats. Data is downloaded from the ship's sensors and weapons systems to provide a battlezone/operational area situation display as well as navigation, target tracking, threat and weapons allocation and weapons control functions. The command and control system can also operate in training mode to provide realistic simulated scenarios and engagements.
The vessel's anti-ship missile is the MBDA (Aerospatiale) Exocet MM40 Block II missile, with a range of 70km. Range and bearing data are downloaded into the missile's on-board computer. The missile uses inertial guidance for the cruise phase of the trajectory and then active radar homing by active monopulse seeker head. The sea-skimming missile approaches the target at high subsonic speed, 0.9 Mach. The two blocks of four launch tubes are arranged crossed, one block facing starboard and one to the port side, on the missile deck to the stern of the main mast.
The ship's surface to air missile is the MBDA (BAE Systems) Seawolf, which has a range of up to 6km against aircraft or missiles. The missile uses a microwave link command-to-line-of-sight guidance system with television and radar tracking. A solid fuel propulsion rocket provides a speed of Mach 2.5. The 16-cell VLS (Vertical Launch System) is installed in the forward main gun deck between the main gun and the bridge.
The main gun, Oto Melara 76mm Super Rapid, installed on the forward gun deck, provides defence against surface and airborne targets. The firing rate is 110 rounds per minute and range is up to 16km. Two MSI Defence DS 30B REMSIG 30mm guns, installed on the port and starboard side on aft upper deck forward of the flight deck, are capable of firing 650 rounds per minute to a range of 10km.
The ship is equipped with two triple 324mm torpedo tubes from BAE Systems.
The electronic warfare suite includes a Thales Sensors Cutlass 242 electronic support measures system and a Scorpion radar jammer. The Super Barricade decoy launch system from Wallop Defence is installed on both sides of the raised mast deck just aft of the bridge.
The aft flight deck, approximately 285m², has a single landing spot for a medium size helicopter, such as the S-70B Seahawk. The ship does not provide hangar facilities.
The ship is equipped with a Radamec 2500 electro-optic weapons director, which includes an eye-safe laser range-finder, TV and thermal imager and is used for gun fire control and surveillance. The hull-mounted sonar is the medium frequency Thales Underwater Systems TMS 4130C1.
The large rectangular antenna of the E- and F-band air and surface search radar, the Alenia Marconi Systems (AMS) AWS-9 3D for surveillance and target indication, is mounted at the top of the main mast tower. The radar system includes two AMS 1802SW I/J band radar trackers, which provide target illumination for the Seawolf missile system.
The ship is powered by four MAN 20 RK270 diesel engines driving two shafts. The ships achieve a speed of 30 knots. The range at an economical speed of 12 knots is 5,000 miles.