Business

Spain prime minister 'stopped' Rolls-Royce contract

Rolls-Royce logo
Image caption Rolls-Royce had the contract sewn up prior to the Spanish PM's intervention, the cables suggest

Rolls-Royce lost out on a key contract with the Spanish military following lobbying of Spain's Prime Minister Jose Luis Zapatero by Washington, according to leaked US diplomatic cables.

Mr Zapatero intervened to hand the helicopter engine contract to US firm GE after the military had decided to go with Rolls-Royce, the cables suggest.

The contract awarded in 2007 is estimated to have been worth £200m.

The cables were released by Wikileaks and published on the Guardian website.

The latest leak comes a day after cables suggested senior Chinese officials had orchestrated the hacking of Google earlier this year that forced the search engine to quit China.

Personal intervention

The latest cables detail how US Ambassador Eduardo Aguirre was "personally convinced that Zapatero intervened in favour of GE".

"Although there was considerable all-source evidence to suggest that the [Spanish] Ministry of Defence decided to award the contract to Rolls-Royce, Moncloa - the office of the president - overturned the decision and it was announced that GE had won the bid," they say.

According to the cable, Mr Aguirre told the prime minister that chief executives of leading US firms may stop bidding for Spanish contracts due to "a growing perception" that the Spanish government was "not welcoming" US bids.

In response, Mr Zapatero told the ambassador "to let him know if there was something important to the US government and he would take care of it".

Subsequently, the US government agreed "to advocate on behalf of GE" in the bid against Rolls-Royce.

When the ambassador told the PM that GE had said "failure to win the contract would cause that branch of GE to cease operations in Spain", Mr Zapatero duly stepped in, the cables suggests.

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