Swan's call for state aid
Oct 26 2004 By Guy Anderson, The Journal
Long-awaited ship blew £40m hole in books
Largs Bay brought shipbuilding back to the Tyne.
The 16,500 tonne auxiliary landing ship rolled down the Swan Hunter slipway on June 18 last year. It was the first vessel to leave the Wallsend yard since frigate HMS Richmond almost a decade before.
But problems building the ship, one of four identical craft built, blew a £40m hole in Swan Hunter's accounts.
The yard bought an off-the-peg Dutch design when it bid in 1999 to build the £160m Largs Bay and the Lyme Bay sister ship.
Problems adapting the plans sent losses soaring, and delayed the project by 12 months. A fixed-price contract meant the Ministry of Defence was unlikely to bail out Swan's.
Chairman Jaap Kroese - who ploughed his personal fortune into bringing shipbuilding back to the Tyne - told The Journal earlier this month that he will invest in the yard again to plug the hole in the balance sheet. However, he is still in talks with the MoD in the hope of changing the original contract.
There were also delays building the Mount Bay and Cardigan Bay - identical sister ships - which are under construction at BAE Systems' yard on the Clyde.
The group, the biggest defence contractor in Europe, has been luckier than Swan's. A clause in their £140m contract means that their losses are recoverable from the MoD.
