Doubts cast on dockyard sale

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The Independent Online

Chief Political Correspondent

Doubts have been raised over the privatisation of Devonport Dockyard, in spite of assurances from a management buy-out team that its plans for the takeover have not been abandoned.

Roger Freeman, Minister of State for Defence Procurement, sought assurances after rumours ran through Devonport and its sister dockyard, Rosyth, in Scotland, that the privatisation plans had foundered.

The collapse of the privatisation of the yard - which now handles all the Royal Navy's nuclear refitting - would be embarrassing for the Government, after the abandonment of Post Office privatisation and its difficulties with privatising British Rail.

In a private meeting, Mr Freeman was given assurances that the buy-out company, Devonport Management Ltd, was not planning to withdraw from the deal.

However, opposition party leaders believe that with a year to go before the new plans are implemented, the privatisation of the dockyard remains in doubt.

Ministers were embarrassed when Devonport was offered for sale and only one bid, that of the management team, was received, in spite of the Government's decision to concentrate all its nuclear refitting at the dockyard.

The defence White Paper published last year said the new arrangements for the two dockyards would be implemented no later than April 1996.

In November, last year, Mr Freeman announced the bids by DML for Devonport and Babcock International Group for Rosyth. He said no other bids had been received and negotiations would take place with each of the companies. In a clear hint that the Ministry of Defence feared the privatisation might not go ahead, he said: "outcomes other than sale cannot be ruled out".

Defence officials have confirmed that following widespread rumours in both yards, Mr Freeman met DML on 3 April and was given the assurances. "We have no reason to believe DML has changed its mind," said an official.