UPDATE 1-Rolls Royce agrees $1.3 bln nuclear contract with MoD

LONDON Wed Feb 13, 2013 8:15am EST

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LONDON Feb 13 (Reuters) - Aero engineer Rolls-Royce has agreed a new ten year contract with Britain's Ministry of Defence (MoD) which will help the department save up to 200 million pounds ($313 million) and sustain up to 2000 jobs in the UK.

The company said on Wednesday that the new contract, which is worth around 800 million pounds, would help deliver cost savings around the provision of nuclear propulsion systems for Britain's existing and future submarine flotilla.

Rolls-Royce said the deal reinforces Britain's commitment to the submarine programme.

Britain's 2010 Strategic Defence and Security Review (SDSR) set the course for future UK defence spending, in which the government said it would cut spending by 8 percent up to 2015.

The government has been trying to bring order to a defence ministry widely lambasted by watchdogs and others for its chaotic and expensive weapons programmes.

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