Firm Behind UK's Ajax Armored Vehicle Project Pays Out £80-M Dividend To Parent
The contractor responsible for the beleaguered £5.5bn Ajax program – which is yet to produce a usable armored vehicle – paid its owner more than £80 million m last year, sparking fresh questions over taxpayer value, Howard Mustoe reported for The Telegraph.
Photo Insert: The Public Accounts Committee of MPs said during the summer that the Ajax program should be fixed or scrapped after delays caused by "a litany of failures."
Ajax has been delayed for 10 years and cost the taxpayer £5-billion so far. MPs have previously called for the scheme to be scrapped while hundreds of soldiers had to be treated for exposure to high noise after working on trials.
The Ministry of Defense (MoD) agreed a fixed-price contract with General Dynamics worth £5.5 billion for 589 of the armored vehicles, but so far just 26 have been delivered and these can only be used for training purposes.
The Public Accounts Committee of MPs said during the summer that the program should be fixed or scrapped after delays caused by "a litany of failures."
The payment “seems remarkable when General Dynamics has failed in delivering Ajax for the British Army and its future still seems in doubt,” said Kevan Jones, a Labor MP and member of the Defense Committee.
General Dynamics has complained that UK authorities had demanded 1,200 changes to the armored vehicle, from the metal plates to machineguns, the tracks, and more upgrades that bulked up the vehicle and made it unstable. Worse, one faction wants the deal to be scrapped after its choice supplier was rejected by the MoD.
The public should be able to scrutinize the contract made between the Government and General Dynamics, he added. The company should be made to explain how the dividend was being funded, “because if it's come from the failure of this contract, that's not good news for the taxpayer.”
General Dynamics UK paid its holding company General Dynamics Ltd. the £80.5 million dividend for 2021, according to a filing for the latter company at Companies House, a payment which was passed on to its owner General Dynamics Global Holdings.