Crunch time for Harland & Wolff

The announcement on March 10 that Chantiers de l?Atlantique had received a letter of intent from Carnival for the

Queen Mary 2

contract dealt a severe blow to Harland & Wolff?s yard in Belfast, Northern Ireland, the only other remaining yard in contention for the contract. The day before the announcement, H&W had handed 90-day protective redundancy notices to its entire 1,745 workforce. Currently the yard is completing two Glomar 456 ultra deep water drill ships for Global Maritime Drilling, but after these are delivered in June, it has no more work.

H&W says that the Northern Ireland government?s financing package did not meet Carnival?s requirements and had a severe impact on the yard?s competitiveness. The yard added that the efforts of the DTI in London to assist the package contrasted sharply with departments in Belfast which, it said, showed a lack of ability or desire to demonstrate any realistic support for the company. This is thought to refer to a grant of almost £40 million in aid that the company was seeking and how it would be paid.

The UK Prime Minister Tony Blair said both an application for government assistance and for a “ship mortgage” had been met in full. Both applications were approved “to the maximum allowed” he added. It had been hoped that last-minute DTI offer to guarantee a loan to finance 80% of the Queen Mary project would aid the shipyard?s prospects. However, H&W described the financial assistance as being too little, too late.

The only hope for H&W and its workforce now appears to lie with the UK government, who will be pressed to give the yard defence projects. The government will also be asked to bring forward its timetable for two new aircraft carriers for the Royal Navy, and give the contract to the yard. However, the yard blames the government for not acting sooner.

The mainstay of H&W?s newbuilding work in recent years has been in the offshore sector. Ola Gjortz of Fred Olsen Energy, the majority shareholder in the yard, explained that this work has dried up because many of the big oil companies have put projects to open new fields on hold.

The repair side of H&W?s business, Harland & Wolff Shiprepair and Maritime Services, is not affected by the troubles at the building yard, and it is business as usual there.