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What the papers say - THE SUNDAY TELEGRAPH

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Britain's largest defence contractor BAE Systems has threatened to pull out of an alliance building two aircraft carriers if KBR, a subsidiary of US contractor Halliburton, is appointed to manage the £4bn contract. BAE has warned the Ministry of Defence (MoD) that KBR lacks sufficient expertise. It has also told the MoD that up to 800 skilled engineers could lose their jobs at BAE's three shipyards if the row is not resolved. MoD officials were to meet with BAE this week.

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