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Thursday, 2 November, 2000, 10:38 GMT
UK cruise liner first in 25 years
Cammell Laird's shipyard on the River Tyne
Cammell Laird's shipyard on Tyneside is expected to profit from the contract
Shipbuilder Cammell Laird has won the contract to build two cruise ships, the first to be constructed in the UK in a quarter of a century.

The contract for two 28,000 tonne luxury liners is thought to be worth up to 344m ($498m), but there are conditions attached.

The deal will go through only if the government is prepared to subsidise Cammell Laird's shipyards at Merseyside, Tyneside, Teesside and Gosport, and is prepared to provide loan guarantees for start-up cruise company Luxus, which has commissioned the 400-berth liners.

Cammell Laird said it hoped to receive grants from the Shipbuilding Intervention Funding, while Luxus expected ship mortgage finance guarantees.

November decision

The Department of Trade and Industry said it would be considering the applications for government aid, while Cammell Laird said it expected a decision by the end of November.

The shipyards, better known for their repair work and conversion of older ships, employ more than 2,000 people.

According to Cammell Laird, the new contract will help to secure these jobs, while the GMB trade union expects the creation of up to 1,000 new posts.

Cammell Laird lost out last month when the Ministry of Defence ordered five roll-on roll-off ferries in contracts worth more than 1bn from three UK shipyards.

Shares in the firm stood 9p, or 12%, higher at 84p in mid-morning trade in London.

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26 Oct 00 | Business
New shipyard contracts top 1bn
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