Split deal on ferries may save Clyde jobs

Thousands of shipyard jobs on Clydeside could be saved by a plan to split a British defence contract between German and Scottish yards.

Ministers facing a political crisis have sought assurances that a German consortium, bidding to supply six roll-off, roll-on ferries to the Royal Navy, will build at least one of the ships at the former Kvaerner Govan shipyard in Glasgow.

The Scottish yard has placed a bid for the entire contract, but theGerman bid is much lower. European Union competition law would, in such a situation, make it difficult for the Government to place the order with Govan, which was bought last year by BAe Systems.

The loss of the entire order, worth £1bn when 20 years of refits are taken into account, could jeopardise 10,000 jobs and what remains of the Scottish shipbuilding industry.Union negotiators indicated last night that securing one of the ferry orders at Govan would bridge the gap between this summer and 2002, when further orders are expected.

Jamie Webster, the convener for the General Municipal Boilermakers Union, at Govan said: "If ... we did not win the whole order but one ship was on offer, you would be absolutely insane to take no work." Donald Dewar, Scotland's First Minister, said: "There is a great deal of action behind the scenes. It is not an easy situation and none of us enjoy the difficulties the workforce is facing."

The GMB has asked its overseas counterparts to investigate reports that foreign crews, and the cheap costs at former Soviet bloc shipyards in Poland and eastern Germany, could explain the apparent German price advantage.

Yesterday, John Edmonds, the general secretary of the GMB, said: "It's amazing to think that our ship and oil rig industry is sinking without a trace. We were once the world leaders in this field and now produce less than an eighth of what we used to. Nelson would be turning in his grave."

Yesterday BAe Systems said: "We are in a competitive situation and it is not appropriate for us to comment on speculation. We have submitted the best value-for-money bid to meet the MoD requirement."