Rosyth win means end for Swan Hunter: 40m pounds government refitting contract goes to Scottish shipyard

THE END of shipbuilding on Tyneside and the loss of 900 jobs at Swan Hunter looked likely last night after the Ministry of Defence gave a vital refitting order to the Rosyth dockyard in Scotland.

CMN, a French-based company planning to take over Swan Hunter if the order was placed, was due this morning to have talks with the shipbuilder's receivers, Price Waterhouse.

Fred Henderson, chairman of CMN support services, said: 'We have not finally said 'no' to the purchase. But I would not like to give anyone the impression of optimism. This is a great disappointment to us.'

Without the pounds 40m contract to refit the auxiliary ship Sir Bedivere, there is just four months' work left at Swan Hunter. Defence ministers said Swan Hunter's tender came fourth, and was pounds 10m higher than the winning bid by Babcock Rosyth Defence.

Swan Hunter has built 2,700 ships since 1862, but went into receivership in May last year when it lost an order to build a helicopter landing ship.

The MoD announced that Swan Hunter might get a smaller refit order for a tanker, the RFA Olwen, but refused to place a firm contract until it was satisfied with the financial viability of the yard. Mr Henderson said: 'The price we would be prepared to offer with just the Olwen contract is probably much less than the receiver is prepared to accept. It is very unlikely that we would be able to reach agreement. The receivers may decide they can get more for the business by closing the yard and selling the assets.'

Ed James, one of the joint receivers, said: 'Without the Sir Bedivere - while I have only had the briefest of discussions with CMN since the news was made public - it does seem it would be unlikely they would be prepared to proceed.

'Regrettably, if we are unable to reach any agreement with CMN very quickly, in all probability there will have to be very significant redundancies.'

The immediate effect of the decision is that 100 technical and design staff who have been working on the Sir Bedivere project are likely to be made redundant. They share the same fate as 238 men laid off a few months ago.

Jonathan Aitken, Minister for Defence Procurement, said last night on BBC radio that the decision could not be affected by sentiment. 'I am very sorry for the effects these competitions may have on the future of Swan Hunter and its workforce.

'This was an entirely fair competition. Swan Hunter lost it. My heart goes out to Swan Hunter but, as a minister, I had no other course than to award the contract to the clear winners, Rosyth dockyard.'

The award of the Sir Bedivere contract to Rosyth came as a boost for the Scottish yard and will ease the pain in Fife caused by the announcement last week by the MoD that the adjoining Royal Navy base at Rosyth was in effect to be closed as an operational base.

Allan Smith, chairman of Babcock Rosyth Defence, the yard's private sector manager, said: 'This is an excellent contract for us to have won against intense competition.' The contract includes an option on two sister vessels, the Sir Geraint and the Sir Percivale, which could bring the total potential value to more than pounds 100m, the dockyard said.

Devonport Management Limited, which also bid for Sir Bedivere, won an order to refit HMS Birmingham. A month ago, the Devonport yard sacked 850 people and warned that more would be made redundant unless it won more orders.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea