MINISTRY OF DEFENCE
News Release (PN 2009/65) issued by COI News Distribution Service on
27 March 2009
The National Audit
Office today published its report into Red Dragon, a joint project
by the MoD and Welsh Assembly to develop part of the St Athan site
near Cardiff into an aerospace business park. The report
acknowledges that, while the Red Dragon project did not deliver
the anticipated savings, the MoD has saved more than £1.4 billion
through a restructure of fast-jet aircraft repair that led to Red
Dragon's early closure.
Defence Minister, Quentin Davis said:
"It is vital that we get the most from defence expenditure,
which is why the closure of the Red Dragon project was the right
thing to do to secure greater savings in the longer term. We
welcome the findings of today's NAO report and its
acknowledgement of the billions of pounds that the MoD has saved.
The Red Dragon super-hanger will now be used as part of the
Defence Training Academy."
The MOD accepts that lessons have been learned as a result of Red
Dragon. However, the decisions taken in 2004 to transfer fast-jet
repair work to RAF frontline bases from St Athan resulted in
savings worth more than £1.4 billion. The move offered better
support to the RAF at lower cost.
The St Athan site will now accommodate the new Defence Training
Academy, under the Defence Training Review. It will create 2,500
jobs on site, with a further 750 to 1500 additional jobs in the
wider economy and up to 1500 jobs in the construction phase. The
aircraft super-hanger originally built as a part of Red Dragon
will be an important part of the new academy.
ENDS
NOTES TO EDITORS:
* The Red Dragon project began in 2000. Before the contract was
signed, the Defence Aviation Repair Agency (DARA) Ministerial
Advisory Board concluded that the project offered savings of £20M
per annum. As a result, the Red Dragon contract was signed in
February 2003.
* In July 2003, an internal report (E2E) recommended that repairs
and support for MOD aircraft and helicopters should be
concentrated at single "hubs" for each aircraft type.
The study team believed that these hubs should be at front line
bases. As a result, it was decided that the hubs would include RAF
Cottesmore, RAF Marham and DARA Fleetlands - but not St Athan.
* Following the review, it was concluded that the Red Dragon
super-hanger would need to attract non-MOD business if it were to
remain viable.
* In November 2004 Minister AF announced that the DARA fast jet
business at St Athan would close by April 2007. This was part of a
series of decisions to save aircraft logistic support costs by
£1.4B over six years, well in excess of the MOD net expenditure on
Red Dragon, estimated at £57M.
* The Defence Training Review Programme seeks to improve and
modernise the delivery of certain areas of specialist Phase 2
(trade training) and Phase 3 (professional training). It consists
of 2 separate Projects termed Package 1 and Package 2. Phase 1 is
Basic Training completed by the individual on joining the Services.
Package 1 is being taken forward as a Private Finance Initiative
Project with the Metrix Consortium as Preferred Bidder. The
Package 1 Project aims to "transform specialist technical
training of the three Services, delivering it from first class
facilities, to meet operational needs over the next 30
years". Subject to approval of the main investment decision
for Package 1, the proposal plans to rationalise the current
training sites to a new site at St Athan in 2015 which will make
use of the Red Dragon Hangar. Construction is anticipated to begin
at the St Athan site in 2010, and it is estimated that the
Colleges will relocate to the new site in 2015.
* The Welsh Assembly Government (WAG) still intend to proceed
with the aerospace park which could create up to a further 2000
jobs if it is successful. The NAO / Welsh Audit Office report also
makes clear that the Welsh part of the site is worth some £45M and
the WAG would therefore be likely to cover its costs if sufficient
land could be sold for development.