Naval Support Contract for Australian Anzac Class Frigates

A consortium formed by engineering and support services firm Babcock International and UGL Infrastructure has been declared as the preferred tenderer for the Royal Australian Navy's Group Maintenance Contract (GMC) for its eight Anzac class frigates.

The contract is expected to be valued at A$300m (£200m) over an initial five year period, with an option to extend for a further five years.

The final contract is expected to be signed by the end of June 2012 and become operational, after a transitional phase, on January 1st 2013.

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According to Babcock this contract marks the company's entry into the surface ship support market in Australia at a time when the Australian Department of Defence is seeking to reform its naval ship repair market.

Babcock and UGL have also been down selected to tender for the Amphibious and Afloat Support Ships' GMC when it is released. This is expected to be by mid-2013.

As of 11:12am shares of Babcock are falling by 1.72% to the 743.5p mark.

AB