Qinetiq slumps on loss of contract from MoD

Shares in technology firm QinetiQ plunged as much as 10% today as it lost a major contract to combine army, navy and air force training at a single college in Wales.

The Ministry of Defence blamed Metrix — a joint venture between QinetiQ and its partner Sodexo — for failing to come up with a cheap enough deal on time.

Defence Secretary Liam Fox told MPs: "It is now clear that Metrix cannot deliver an affordable, commercially robust proposal within the prescribed period."

Sources close to QinetiQ admitted the project has been dogged by delays but suggested the timing of today's announcement was politically motivated ahead of tomorrow's Comprehensive Spending Review.

Fox said the MoD still wants to go ahead with the Defence Training Review programme and is not ruling out the proposed site in St Athan in Wales.

QinetiQ shares recovered slightly to settle down 3% after news that the MoD had axed Metrix "with immediate effect". The review could have been worth as much as £14 billion over the next 30 years to Metrix.

QinetiQ said it expects to write off £37 million it has already spent on the project.