$458 Million Contract Injects Critical Capital Into Ailing Shipbuilder
Harland & Wolff's (H&W) existence was extended last week as it won a 300 million pound ($458 million) contract to build four passenger ferries.
The order from Bahamas-based Seamasters International Inc. includes an option for two additional ships. "This is very good news for us. If the full six vessels are ordered, we're looking at work until 2004," spokesman Peter Harbinson said
The order came just a day after Harland & Wolff workers accepted a three-year pay deal, a deal which was equally crucial in ensuring the company's near-term future.
Harbinson estimated the order for the RoRo ferries would secure around 1,000 of the 1,300 core jobs at the shipyard. The yard, whose giant yellow cranes dubbed "Samson and Goliath" dominate the Belfast skyline, is still a mainstay of the British-ruled province's economy.
Harland & Wolff, controlled by Norway's Fred Olsen Energy, said efforts were being made to secure steelwork and outfitting contracts from the marine and commercial sectors before construction work begins on the ships at the end of this year.
"There's still some under-utilization but we are looking to fill that with other contracts. There are a number of other options which might possibly be converted into orders," Harbinson said.
The shipyard last year reported an operating loss before interest of $1.7 million on turnover of $619 million.
The first ship - an Atlantic 4000 class which can carry around 1,000 passengers at a top speed of 27 knots - under the new contract is due to enter service in mid-2002 and the remaining vessels will be delivered before early 2004 if the options for the extra two ships are exercised - which would bring the order value up to around $762 million.
Harland & Wolff said it expected the Atlantic 4000 to be 15-20 percent more fuel efficient than rival designs because of its reduced steel weight and new hull lines. The ships will be powered by Siemens (SIEMENS.NS)
diesel-electric propulsion systems.
Workers Accept Pay Offer
Harland and Wolff shipbuilders narrowly accepted a pay offer that could throw a lifeline to the struggling yard. The yard, majority-owned by Norway's Fred Olsen Energy, could be poised to win a $613 million order for four Norwegian ferries that may help it avoid closing its gates for good. "According to the negotiations we have been having with the company, there is an order now available on the basis that we were prepared to accept these proposals," Joe Bowers of the MSF union said.
The margin was slim - at 424 to 389 - to back what management said were final proposals that would give skilled employees about $475 a week. That wage would be guaranteed until at least January 2003 and include a further bonus opportunity.
Harland and Wolff had no immediate comment on the vote, but a spokesman said earlier that the company's future was tied to how the workers reacted to the pay offer. "If the employees vote to accept the proposals it may enable us to secure a major order, with the objective of creating a long-term and viable shipbuilding business for Harland and Wolff," he said.
"There are a number of orders on which we are in quite advanced negotiation but nothing has been signed, sealed or delivered."
Last year it reported an operating loss before interest of $1.7 million on turnover of $550 million. That compared with a profit of $1.5 million in 1998. - (Reuters)