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Last Updated: Wednesday, 15 November 2006, 11:22 GMT
Dockyard riding a rollercoaster
by Jonathan Morris
BBC News South West

Vanguard Trident submarine at Devonport
Devonport is the sole UK refitter for Trident submarines
The Ministry of Defence's warning to Devonport's owners is the latest in a 20-year series of ups and downs for Western Europe's largest naval port.

On Wednesday the MoD revealed it is trying to block a share flotation by the yard's majority shareholder, KBR, a subsidiary of US defence giant Halliburton.

It warned if KBR did not delay its stock market launch, it would risk losing its contract to operate Devonport.

The MoD's intervention raised new fears among local business leaders about the historic yard which was taken over from the MoD by DML in 1987.

Even before the takeover there were concerns about the yard's future.

Devonport dockyard
Founded in 1691
Trident subs refitting base
Covers 330 acres
Employs 4,800
Owned by Halliburton KBR (51%), Balfour Beatty (24.5%) and The Weir Group (24.5%)
Workers downed tools in 1986 amid fears that 7,000 jobs could be lost.

The actual job cuts announced were 2,300 over four years, but the number of workers has over time dropped from 13,000 to 4,800 now.

The yard won a 30-year contract in 1993 to refit Vanguard Class submarines, but four years later lost a 10m contract to refit HMS Argyll, a type 23 frigate.

However a year later the yard was building new dry docks and workshops in a 350m facility for refitting Trident submarines, making the UK yard reliant on the future of the nuclear deterrent.

Now the dockyard is facing new uncertainty with a MoD review of the UK's three naval bases which "could lead to radical reductions in overheads and naval base capacity".

The yard is absolutely crucial to Plymouth
Tim Jones, Devon and Cornwall Business Council
The main concern is that Plymouth could lose business to Portsmouth, a real blow to the city where thousands are employed in relatively highly-waged jobs.

Devonport's origins date back to 1691, when William of Orange commissioned the building of a new dockyard to support the Royal Navy in the Western Approaches.

Devonport, which made operating profits of 30m in the first six months of this year, now puts about 360m into the Devon and Cornwall economy every year - about 2% of the total - and about 400 local firms also have contracts with the yard.

Tim Jones, from the Devon and Cornwall Business Council, said: "The yard is absolutely crucial to Plymouth."

"It would be absolutely calamitous for Plymouth if there was any change in the procurement arrangement."

Output falling

Peter Gripaios, professor of applied economics at the University of Plymouth said Plymouth's future was already on a knife-edge.

"Plymouth has always been reliant on the docks and other big companies like Toshiba and Wrigley's are always very vulnerable.

"Plymouth has been trying to attract more inward investment with knowledge-based companies, but so is everyone else.

"The figures show that Plymouth is losing out to cities like Bristol where output per head is rising, yet in Plymouth has dropped from 103% of the average in 1993 to 81%."

Recommendations from the naval bases review are expected to be presented to the government in the spring of next year.

UK docks fear over KBR flotation
15 Nov 06 |  Business

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