The British Ministry of Defense has given BAE Systems a $5.57 billion contract to supply the British armed forces with ammunition for the next decade and a half, Defense News reports.

The contract will serve not only to supply the British military with 80 percent of its munitions needs for the next 15 years but also to revamp a slumping British ammunition industry. BAE Systems will use a very sizable portion of its contract to revamp its three production facilities in Birtley, Glascoed and Radway Green. The other 20 percent will come from previous agreements with other companies.

Indirectly, the contract will thus also create a number of jobs and give a slumping British economy a small boost. In 1987 BAE took over the Royal Ordnance operation and employed 19,000 workers in 13 plants. That number had shrunk to 1,700 employees in three plants.

The cash injection will also allow BAE Systems to crank up its output to the point where it can start seriously competing internationally and increasing its exports. They are expected to grow by as much as 30 percent.

The need for the contract was especially dire considering Britain's pressing and unrelenting need for ammunition for its operations in Afghanistan and Iraq.

The Radway Green plant already had been charged with increasing its output three-fold over the last two years to handle the never-ending demand. The three plants will receive $52 million, $63 million and $74 million, respectively, to be updated and modernized. Their previous annual budgets had been closer to $20 million to $30 million.

The Radway Green site is expected to double its production of 5.56mm and 7.62mm ammunition by 2012.

Initially the deal will be worth about $4 billion, with the potential to grow to the full $5.57 billion amount for the supply of small arms, mortar bombs and medium tank, artillery and naval gun ammo.

Russia finally transfers T-90 tank barrel tech to India

Russia finally has agreed to transfer the remaining technology required to build the T-90 tank to India. However, what looks like Russian generosity on the surface is actually the product of a longstanding argument and unfulfilled promises by Russia to India.

Russia was supposed to transfer the remaining barrel specifications to India in 2001 when the knowledge exchange was arranged. The information is necessary for the Indian Ordnance Factories Board to complete its production of 1,000 T-90S tanks that are to be built by 2020. The tanks will complement India's 310 T-90 tanks. But the transfer stalled because of Russian demands for more money.

Meanwhile, the Indian army also announced it had ordered $2 billion worth of cruise missiles from Russian-Indian firm BrahMos.

Spar to refurbish three RAF Hercules

The British Royal Air Force will have to wait at least two extra years before it can replace its Lockheed Martin C-130K Hercules fleet because of ongoing delays and problems with the EADS Airbus A400M airlifter, which has been ordered. Therefore, the RAF has contracted Canadian firm Spar to refurbish three of its Hercules, Defense News reports.

The RAF's five Hercules, which are very actively being used in Afghanistan and Iraq, are in need of new outer wings in order to extend their shelf life through 2012. Although they originally were designed to be retired in 2010, the Airbus delays have forced the RAF to contract refurbishments in order to add 15,000 flight hours to the Hercules' lifetime.

Spar, which already has serviced 300 Hercules in Canada, will service the first three units for $18 million. It could also be given the contract to work on the other two units. The second deal is expected to be worth $12 million.