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Thursday, October 28, 1999 Published at 15:55 GMT 16:55 UK


UK: Northern Ireland

Cash lifeline for shipyard

Agreement reached on completion of drill ship contract

The Belfast shipyard Harland and Wolff is receiving a £19m stage payment from a major customer as part of an attempt to settle a dispute which was threatening the yard's future.

Harland and Wolff Holdings is currently working on two deep sea drill ships for the US oil company Global Marine.

One is almost complete and the other is part built.

During construction Global Marine asked for major changes to be made to the job specification which have cost approximately £100m.


[ image: Contract changes pushed up costs by £100m]
Contract changes pushed up costs by £100m
A dispute arose over how much of the extra cost should be met by the customer and how much by the shipyard.

Harland and Wolff had warned that a failure to reach agreement could have serious consequences for the financial future of the company, its international reputation and its ability to attract orders.

Now both sides have issued a joint statement saying they have had "positive and productive discussions concerning the completion of the two drillships", including an agreement on a stage payment.

The shipyard's chief executive, Brynjulv Mugaas, said: "Our recent discussions with Global Marine have resulted in positive steps towards securing the funding needed to complete construction of the drillships.

"These discussions also included representatives of the shipyard workforce in recognition of its crucial role in ensuring the timely completion of the vessels," he said.

Working together

Global Marine chief operating officer Jon Marshall said the two companies would be working together to determine completion costs for the drillships.

He said: "We will then work together with Harland and Wolff and other interested parties on the development of suitable guarantees and funding that Global Marine will offer Harland and Wolff to ensure completion of the vessels and contribute towards the long term viability of the shipyard."

Peter Williamson, regional secretary of the Amalgamated Engineering and Electrical Union, welcomed the progress that had been made.

He said: "The determination of the two companies to find a way forward together will help alleviate many of the concerns amongst the workforce and the wider community.

"The employees and the unions are prepared to play their role fully in creating the conditions which enable timely completion of the drillships and secure the long term future of Harland and Wolff."



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