Swan Hunter given short-term reprieve

THE RECEIVERS of the warship builder Swan Hunter last night won a short-term reprieve for the Tyneside yard after the Ministry of Defence agreed that work could continue on an order for three Type 23 frigates, writes Michael Harrison.

Mark Homan of Price Waterhouse, one of the yard's administrative receivers, said that the 2,200-strong workforce should report for work today and that there would be normal working on the frigates this week.

Mr Homan said: 'This temporary respite provides a breathing space but is not a solution to Swan Hunter's problems.' The receivers would be submitting proposals to the MoD for further work on the frigates as soon as more analysis of the yard's position had been carried out.

Swan Hunter called in the receivers last week, three days after losing a crucial pounds 170m order for a Royal Navy helicopter carrier to two rival yards, VSEL in Barrow and Kvaerner Govan on the Clyde.

The collapse has raised fears not only for the yard's 2,200 workers but also for the 4,500 jobs in the local suppliers and service companies that depend on Swan Hunter.

A permanent solution to the yard's plight rests on a buyer being found but it was too early to judge whether this would be achieved, Mr Homan said.

The four-man management team that bought the yard from state-owned British Shipbuilders in 1986 is pressing for an independent investigation into the MoD's award of the helicopter carrier order. Swan Hunter's bid was pounds 450m higher than the successful tender.