STEng – BT
ST Engg US unit clinches US$393m navy deal
Phase II brings total contract value for overall missile craft project to US$642m
ST Engineering’s US shipyard unit VT Halter Marine has secured a US$393 million contract for Phase II of the Egyptian Navy’s Fast Missile Craft (FMC) project. This new deal, in addition to another US$13.5 million awarded due to changes in work scope in Phase I brings the total contract value for the overall project for the three FMCs to US$642 million.
Work commences immediately, and delivery of the first FMC is expected by mid-2012 with full completion by April 2013. ST Engineering had previously announced on Dec 1, 2005 that it had secured the initial Phase I functional design contract for approximately US$29 million. At the time, it was estimated that the programme’s value could grow to over US$450 million after Phase II was added.
Two subsequent contract modifications were awarded in November 2006 and June 2007 respectively for procuring the project’s long lead items which added US$206.5 million to the contract. Subsequent changes in the scope of work further increased the Phase I contract value to the current US$249.2 million. The contract is from the US Navy for the Egyptian Navy under its Foreign Military Sales programme.
The FMCs are designed to perform coastal patrol, surveillance, interdiction, surface strike and naval battle group support for Egypt’s naval needs of the future. These vessels will allow Egypt to maintain the security of its coastal regions for both itself and friendly countries, while denying access to the areas by any future adversaries.
Each vessel will be approximately 62 m in length and will incorporate ship signature control technology. High speed and manoeuvrability are two of the ship’s primary assets to fulfil these roles. The vessels will also incorporate numerous combat systems and electronic sensors that give them capabilities in anti-aircraft, anti-surface and electronic warfare. The Egyptian Navy has been planning a programme since the mid-1990s to replace its ageing fleet of 21 Fast Attack Craft, most of which are past their effective service lives.
‘VT Halter Marine is honoured to partner the US Navy in this Fast Missile Craft project. This Phase II contract award attests to the US Navy’s growing trust in our design capability and sophisticated engineering forte,’ said ST Marine president Chang Cheow Teck.
This contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.
ST Engineering stock closed four cents lower at $2.60 yesterday.