£450m Rolls contract not enough to save jobs

Rolls-Royce, the engineering group, has completed two years of negotiations to win contracts worth £450m to build two power stations in India.

But the deal, awarded to the company's Parsons Power Generation division, based in Newcastle, is not big enough to stop several hundred job cuts.

Parsons will be in charge of the projects to build a 208MW gas-fired plant at Kakinada in Andhra Pradesh and a 500MW coal fired one at Balagarh, West Bengal. The deal has been won in co-operation with America's Westinghouse Electric Corporation. The power stations will have three Westinghouse gas turbines, three combustion heat recovery steam generators and a Parsons 70 MW steam turbine generator.

"We expect the power stations will generate electricity during 1996," a Rolls-Royce spokesman said. But he said the deals would have no bearing on last month's announcement of 400 redundancies. This planned cutback, which will bring the Parsons workforce down to 1,500, about 1,000 less than a year ago, was aimed at reducing costs to make the company more competitive.

Separately, Kawasaki Heavy Industries said it was considering whether to join the BMW-Rolls-Royce aero-engines joint venture to collaborate on development of the BR700 series engine. BMW-Rolls-Royce is seeking to supply aero-engines to the YSX, Japan's next generation of national jetliners.