Brazil deal on table

The South American giant has signed a defence co-operation agreement with the UK and is looking to invest heavily in its armed forces and revamp its navy.

The deal on the table with BAE is understood to cover six patrol boats similar to the type recently built for Trinidad & Tobago and a further five or six of the next generation Type-26 frigates which are now at the design stage.

The frigates are designed to combat submarines, protect the fleet and support land forces and are worth up to £400m each, when built in the UK. The patrol vessels are worth up to £80m each at UK prices and would mainly guard Brazil’s vast offshore oil interests.

Now busy at work on sections of what is scheduled to be the first of two aircraft carriers for the Royal Navy, any orders could help secure future jobs for the Portsmouth yard’s 3,000 workers.

However it is unclear how many of the vessels would actually be built in the UK if the deal is signed. The offer aims to help “enhance its indigenous industrial capability by enabling Brazil to develop an independent, sustainable naval shipbuilding and through-life maritime support capability”.

That is likely to mean the initial vessels are built in the UK at BAE’s yards in Hampshire and Scotland with the remaining order being developed in partnership with Brazilian yards.

The Hampshire-based ship support division of the business would also receive a major boost from the decades-long “comprehensive through-life capability management and training” side of the deal.

Dean McCumiskey, BAE Systems’ managing director for the west, said: “If BAE Systems is selected to support Brazil’s ambitious naval re-equipment programme, the ships we develop will be built at a partner shipyard in Brazil, with maximum content sourced from the wider Brazilian industry. This will help to sustain jobs and support the development of skills and high-end technology transfer between the two countries.”