Recently, the British defense shipbuilder Babcock disclosed to investors that it expects to record a substantial loss of approximately £140 million due to extensive rework required on the hulls of the first two Type 31 frigates it is building. The rework is reportedly having a severe impact on production efficiency at Babcock’s shipyards.
In regulatory filings, Babcock noted that due to design changes, the hulls of the Type 31 frigates being built at its yard will require extensive rework, with the scope of the rework far exceeding expectations. The rework is concentrated in the later stages of construction, which means it will entail high costs and present greater challenges. The rework primarily affects the first and second ships of the Type 31 frigate program; the third and fourth ships are still in the early stages of construction and have not been affected by the later design adjustments.
Babcock stated that this rework has set back the construction schedule of the Type 31 frigate program and severely impacted the shipyard’s production efficiency. Furthermore, since the contract includes a fixed-price clause, Babcock will bear the full cost of the additional rework, which will directly affect the company’s profits. The company estimates that the rework will cost approximately £140 million, including additional labor, materials, and a project risk reserve.
The two affected Type 31 frigates are HMS Venturer and HMS Active, which were launched in 2025 and 2026, respectively, and are currently undergoing outfitting. The first ship, HMS Venturer, was originally scheduled to be delivered and commissioned in 2023, but this has since been postponed to 2027.
The Type 31 frigate is intended to replace the Royal Navy’s aging Type 23 frigates, and it is crucial that these new vessels be delivered on schedule. Currently, the condition of the Royal Navy’s remaining Type 23 frigates (only five are still in service) is deteriorating, and they are being decommissioned at an accelerated rate due to aging. Consequently, there is an urgent need for replacement frigates to bolster the naval fleet.
To address the Royal Navy’s current challenges, in 2019 the UK Ministry of Defence selected Babcock to build five Type 31 frigates, valued at approximately £2 billion, with plans to complete the project within 10 years. Based on the provisional delivery date for the first ship, the project is expected to face a delay of at least four years. In terms of project costs, cumulative losses have now exceeded £300 million, all of which will be borne by Babcock.