Richard Norton-Taylor
Wednesday February 27, 2002
The Guardian

Britain's armed forces are to be provided with a new satellite communications system under a private finance initiative programme worth about £2bn and creating or sustaining up to 1,500 jobs across Britain, the Ministry of Defence announced yesterday.
The British consortium Paradigm was chosen as the preferred bidder for the programme, Skynet 5.

The European Aeronautic Defence and Space Company, Eads, which holds a 75% share in Astrium, Europe's largest space company, and BAE Systems, are Paradigm's two parent firms. Astrium has been struggling in the civil satellite market because of the downturn in the telecoms industry. Other companies involved include Serco, Cable & Wireless, Logica and General Dynamic.

Defence minister Lewis Moonie described Skynet 5 as the biggest MoD private finance initiative project to reach preferred bidder stage. "We are getting this service for a lot less than we would have paid if the MoD had followed a traditional procurement route and ordered the satellites itself and operated them using its own personnel."

Mr Moonie said price had won Paradigm the deal over rival Rosetta Global Communications, a consortium consisting of the telecoms firm BT Group, US defence contractor Lockheed Martin and BAE Systems.

"At the end of the day, we chose on the basis of value for money."

The government's decision throws a lifeline to the British operations of Astrium. "Hundreds of jobs will be safeguarded and created at our Stevenage, Portsmouth and Poynton sites," Astrium managing director Chris Chant said.

Skynet 5 will provide continuity of satellite communications services to British forces with the capacity to meet the expected growth in traffic up to 2018, the MoD said.