Secret cash for Swan Hunter

The British government has been accused of trying to keep secret an £84m cash lifeline to the troubled shipyard of Swan Hunter in the north-east of England and which is located near the constituencies of the prime minister and other senior cabinet ministers.

The conservatives demanded to know why there had been no formal announcement of the funding which was handed to Swan Hunter last month. The timing, coming just months before the expected election in May, was described by the tories as “suspicious”. The ministry of defence said the money was made available to the shipyard so it could complete a £160m contract for two Royal Fleet Auxiliary vessels after the yard found it needed more money to complete the job. The MoD also allowed Swan Hunter to deliver the first ship one year later than planned in 2006.

The MoD claims Swan Hunter under-estimated the engineering requirement in the design and construction of the ships and agreed an £84m contract amendment for the revised programme to fill the technical deficiencies of the company to take forward the project. Although the deal was agreed on December 10, there was no formal announcement. The MoD denied the news was “sneaked out” pointing out that local media in the north-east was informed.

Jaap Kroese, the yard’s owner, blamed the need for the cash call on late design changes by the MoD. “The MoD changed the design. The original offer was for entirely different ships.” This was denied by the MoD.