The US could block plans by the British government to privatise the
The documents also state that the British army is "understandably nervous" about the sale to a private company of the
Ministers announced plans to sell off the DSG in the 2010 Strategic Defence and Security Review as part of plans to slash the MoD budget, raising hundreds of millions of pounds. A formal invitation to tender is due in a few days.
But the documents, marked "restricted - commercial", spell out fears in
The process was made easier by the US-
In exchange, the
It is the risk to this agreement that is at the heart of the problem. Indeed, US opponents of the treaty at the time pointed to the case of a US defence contractor that illegally transferred classified night-vision technology to
Tory and Labour MPs, as well as trade unions which fear job losses and closure of maintenance and repair bases, have already voiced opposition to the sale.
But the documents show that worries extend to the heart of the US and British military authorities. Top-level talks have taken place between US and
A page marked "Risks" that lists measures taken to mitigate them states: "IPR issues are a potential showstopper if the department does not judge that a buyer would have sufficient rights to deliver the requirement. Risk if sale goes ahead on basis of incomplete information, post-sale IP owners could refuse access to the IP, meaning DSG services couldn't be delivered and unavailability of equipment."
The same page suggests the US would veto the handing of highly sensitive technical information to a private company if it was worried that agreements did not conform with legal requirements under the International Trade in Arms regulations (
The risk assessment states: "US government will be unwilling to agree to the transfer of activity on
It is understood any contract given to a private company would involve around pounds 1.4bn of work over 10 years.
The papers acknowledge concerns that a sale, if not handled well, might not save money and might lead to legal problems that could cause crucial equipment to be unavailable.
They also cite concerns over job losses and the security of supply of equipment.
An MoD source said the sale of DSG would benefit taxpayers when completed in late 2014. "This will allow us to better concentrate resources on the frontline, rather than the behind-the-scenes supporting functions such as vehicle repairs and maintenance."
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