The UK Ministry of Defence (MoD) has granted Rolls-Royce its largest-ever contract, worth US$11.1 billion (£9 billion), to design, build, and support nuclear submarine reactors for the Royal Navy, which plays a key role in upholding the UK’s nuclear deterrent. 

In a press release dated January 24, Rolls-Royce announced, “Rolls-Royce has signed the biggest UK Ministry of Defence (MoD) contract in its history.” 

The new eight-year agreement, referred to as the “Unity” contract in a statement, aims to strengthen the UK’s continuous at-sea deterrent (CASD). The contract will deliver extensive support to the in-service fleet of the UK Royal Navy submarines throughout its term. 

Additionally, it includes sustained assistance for the construction and commissioning of Dreadnought Class submarines, alongside the commencement of the previously outlined SSN-AUKUS agreements.

Maria Eagle, the UK Minister for Defence Procurement, informed lawmakers that this contract will allow Rolls-Royce to operate more seamlessly and efficiently, driving cost savings, reducing waste, and saving over £400 million (US$499 million) while fulfilling the government’s pledge to deliver value for taxpayers. 

UK Defence Secretary John Healey remarked in the MoD statement that national security is a cornerstone of the government’s transformation agenda, and this contract underscores the commitment to the UK’s nuclear deterrent, which remains the ultimate safeguard in an increasingly perilous world. 

The new contract represents a vital step in sustaining the UK’s nuclear deterrence capabilities, which are uniquely submarine-based. 

Rolls-Royce said, “It [contract] signposts the UK’s commitment to the continuous at-sea nuclear deterrent and Rolls-Royce’s continuing dedication to the UK Royal Navy and the Defence Nuclear Enterprise.”

Unlike other nuclear-armed nations, Britain’s deterrent is entirely reliant on its fleet of submarines, as it does not deploy ground or air-launched nuclear weapon systems.

Currently, the Continuous At Sea Deterrence (CASD) is maintained by the Royal Navy’s Vanguard Class nuclear-powered ballistic missile submarines (SSBNs) equipped with Trident 2 D5 missiles. 

However, the Vanguard Class will soon be phased out in favor of the new Dreadnought Class submarines, set to enter service in the 2030s. 

The planned future submarine program is expected to cost approximately £31 billion (US$ 38.70 billion), with an additional £10 billion (US$ 12.48 billion) set aside as a contingency fund. 

Each of the Dreadnought Class submarines will be armed with the Trident weapons system and carry four Spearfish medium-range torpedoes to ensure that the UK’s nuclear deterrent remains capable of meeting future threats.

In addition to the submarine program, the UK government is actively involved in the US Navy’s initiative to extend the operational life of the Trident II D5 missile. 

The upgraded version, known as D5LE, is expected to remain in service until the early 2060s. A comprehensive review of the missile is scheduled for 2025, followed by ground testing to guarantee its continued reliability. 

AUKUS Nuclear Submarines

In addition to the ongoing support for the construction and commissioning of the Dreadnought Class submarines, the newly awarded contract also covers the beginning of the SSN-AUKUS agreements. 

In March 2023, Rolls-Royce was confirmed as the supplier of the reactors for a new fleet of nuclear-powered submarines, a cornerstone of the AUKUS defense pact between the three nations. 

This partnership aims to enhance the defense capabilities of each nation, with the submarines set to be constructed in both the UK and Australia, utilizing cutting-edge technology from all three countries. 

The integration of these diverse technological advancements will allow the submarines to meet the highest performance and reliability standards. 

Rolls-Royce has committed to substantially expanding its nuclear reactor production facility in Derby, England, to meet the escalating demand from the Royal Navy and the AUKUS partnership. 

The expansion will nearly double the current size of the facility and will allow the company to meet the growing production requirements for both the UK and Australian nuclear submarines. 

In 2023, the UK government allocated £4 billion (US$4.99 billion) to Rolls-Royce and its British manufacturing counterparts, BAE Systems and Babcock, through the AUKUS Detailed Design and Long Leads (D2L2) phase contracts. 

These funds will support critical design and prototyping activities and procure long-lead items for the future fleet of UK submarines.

These submarines will replace the Astute-Class (SSN) vessels, expected to be phased out by the late 2030s, ensuring that the UK’s nuclear-powered submarine fleet remains cutting edge.

Meanwhile, the Royal Australian Navy’s new SSNs are expected to be delivered from 2040 onwards. Before this, the US will provide Australia with three Virginia-class submarines, with the potential for two additional units. 

These submarines will replace Australia’s aging fleet of Collins-class diesel-electric submarines, which have served for decades but are now being phased out in favor of the more advanced SSN-AUKUS vessels.

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