Stephen Byers News

Trade and Industry Secretary Stephen Byers last Thursday promised the government would give "fullest consideration" to Govan shipyard's bid for a defense contract for roll-on roll-off ferries. The government is in a precarious position with the contracts, stuck between selecting a shipbuilder in accordance with EU directives regarding fair competition and subsidies, balanced against the expected political pull to place the contract with a national yard. As the Scottish shipyard's future hangs in the balance, Byers said no decision had been made on the Ministry of Defense (MoD) contract but added the government was conscious of the importance of the order. "No decisions have been taken over the award of future MoD orders which could affect this yard.

Shares in Cammell Laird fell nearly nine percent on Thursday after news the British shipbuilder's $500 million contract with U.S. firm Luxus was at risk, threatening a second blow to the yard in as many months. Since it began a dispute with Costa Classica -- an Italian unit of U.S group Carnival Corp. -- last Autumn over a key cruise ship contract, which was subsequently terminated, its shares have fallen dramatically from a year high of 147p. While the Costa Classica dispute raged on -- leading to 450 job losses and an expected impact on year results -- the company was hopeful that the Luxus contract would provide bedrock work throughout the group for the next three years.

Cammell Laird's $500 million contract with U.S. firm Luxus could fail unless loan guarantees are received from the British government by the end of February. "It's urgent. I'd like to think it (loan guarantee approval) was certainly this month," Juan Kelly said. Kelly said he had written to British Trade and Industry Secretary Stephen Byers to urge the speedy approval of loan guarantees for Luxus, which has ordered two luxury liners from Cammell Laird. Without the guarantees, Luxus, which is a start-up company, may not get bank loans to fund the orders, sources at Cammell Laird said recently. The guarantees could cover some 60 percent of the value of the contract.