Every British military move in Falklands has drawn ire from Argentina, which has ratcheted up an international campaign to dispute Britain's sovereignty over the islands. Argentina and Britain went to war over the islands in 1982 after an Argentine force, backed by the country's dictators at the time, invaded the territories.
Argentina's takeover bid was foiled by Britain, but the resulting conflict caused about 1,000 deaths among civilians and military personnel. Despite a formal Argentine surrender after retreat from the Falklands, Buenos Aires revived claims over the Falklands, now vigorously orchestrated by Argentine President Cristina Fernandez de Kirchner.
Interserve Defense said it will upgrade Falkland defenses as part of a $700 million five-year package that includes similar upgrades in Ascension Island, also in the South Atlantic, and British military bases in Cyprus and Gibraltar in the Mediterranean.
The allocated military expenditure on Falklands and Ascension islands was not immediately announced. Britain is also building a $400 million airport on St. Helena, the last exile home of defeated French Emperor Napoleon Bonaparte, which will make air travel to and from the Falklands easier than it is now.
The Falklands are currently used by British forces for combat training before deployment in the Middle East and Afghanistan.
Interserve Defense said its work in the South Atlantic would run to 2017 and involve "expanding the scope" on Ascension Island.
"By providing a single, strategic, U.K.-based management structure and a bundled package of services for all the territories, Interserve will create efficiencies and deliver more for less, ensuring an enhanced service together with significant cost savings," the company said.
It said the contracts will cover mechanical, electrical and building-related services.
Interserve operates in the public and private sectors in Britain and internationally, offering advice, design, construction, equipment and facilities management services. The company has headquarters in Reading, Berkshire, England, a workforce of about 50,000 people worldwide and reported revenues of about $3 billion.
Interserve Chief Executive Officer Adrian Ringrose said the company's in-depth understanding of Britain's defense establishment "will enable us to give these bases the kind of specialist support they need in order to carry out their activities in sometimes very difficult circumstances."
Argentina and Britain are in a tense standoff over the Falklands, partly the result of recent reports of successful undersea drilling for oil and gas by U.K. oil exploration companies.
Last week, Argentina reacted angrily to a London announcement that Prince William will serve as part British forces on the islands next year.
William, the second in line to the throne, is a Royal Air Force search and rescue pilot. Officials said the 29-year-old prince will begin the six-week deployment in February. An Argentine official, Sebastian Brugo Marco, told Argentine paper La Nacion the move was a "provocative act."
London defended the deployment as a normal part of William's training. William's uncle, Prince Andrew, served in the Falklands conflict as a Sea King helicopter pilot.