Paul Kehoe (Wexford, Fine Gael)

The contract price for the provision of two new offshore patrol vessels for the Naval Service is €99 million, exclusive of VAT, and subject to contract terms and final agreed costs. In addition, the cost of providing a weapons system for the ships, similar to the systems on LE Roisin and LE Niamh, will be €7.8 million, exclusive of VAT. The contract for the two ships was placed with Babcock Marine UK in October 2010. Payments on the contract are scheduled over a period of eight years, 2010-17, and are being funded from within the annual defence budget.

A total of €38.7 million has been paid over to date on the contract, including VAT payments to the Revenue Commissioners. The next stage payment of €12 million is scheduled before the end of March 2012 with an accompanying VAT liability of €2.7 million falling payable.

Preparations for the construction of the ships have commenced in Appledore, UK, and the first cutting of steel took place in November. The first ship is scheduled for delivery in early 2014. The second ship will follow one year later. I am advised that the production schedule is on time and in accordance with the contract and that to date there are no difficulties foreseen.

The acquisition of these modern new vessels is a priority for the Defence Forces. The Deputy should note that Naval Service vessels are replaced when they have come to the end of their useful life, which is normally around 30 years. These acquisitions, combined with a continuous process of refurbishment and repair, will ensure that the operational capability of the Naval Service is maintained at a satisfactory level in the coming years.

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