StockMarketWire.com - Engineering services group Babcock said Monday that its joint venture with UGL had been awarded a new contract by the Australian Defence Force, worth around AU$1.5 billion for up to 15 years.

Babcock's share of the initial contract, which was for an initial period of five years with the expectation of two further five year extensions, would be worth AU$250m.

The partnering agreement, which was won in a competitive process, sees Naval Ship Management appointed Asset Steward of the largest vessels in the Royal Australian Navy: two flagship Canberra Class Landing Helicopter Docks and their 12 associated amphibious LHD landing crafts, the Babcock said.

The joint venture would begin the work to sustain and support these critical vessels in July 2019, Babcock confirmed.

'We are delighted to have been chosen for this strategically important role which builds on our existing relationship with the Australian Defence Force,' said Babcock Chief Executive Archie Bethel.

'Through NSM we will apply Babcock's digitally enabled asset management capabilities to support this strategically important capability over the next decade and beyond.'

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