Harland & Wolff's expertise in building high value-added vessels for the oil and gas industry would stand to it in its bid to construct two £740 million sterling (€1.1 billion) aircraft carriers for the British Ministry of Defence, a spokesman said yesterday. The Belfast shipyard, which made a £900,000 (€1.4 million) operating profit last year compared to a £2.1 million (€3.2 million) loss in 1997, faces a shrinking order book as exploration companies cut back on vessels because of the slump in oil and gas companies.
But Mr Peter Har binson, press officer for the company, said it was one of five British shipyards that could fulfil a contract with the defence company which wins the £1.5 billion order. Six defence companies have been invited to bid to provide the two 40,000 displacement tonne carriers.
"There is a lot of similarity between those vessels and the very sophisticated oil and gas off-shore vessels that we are building at the moment," he said.
The companies invited to make bids for the order, due to be delivered by 2012, are British Aerospace, Lockheed Martin, Raytheon, Marconi Electric, Boeing and ThomsonCSF. Just three of them will make it to the design phase in the autumn and these will be reduced to two for the risk reduction contract. Following a yearlong study, a single bidder will emerge.
For a partnership agreement with the successful bidder, Harland & Wolff, owned by the Norwegian-based Fred Olsen group, would vie against Barrow and Birkenhead, both owned by VSEL; Kvaerner Govan which has been put on the market by its Norwegian owners; and Swan Hunter on Tyneside.
During 1998, Harland & Wolf made advances in the transition from a being a traditional shipbuilder to a provider of high added value vessels. But the company chief executive, Mr Per Nielsen, revealed that the yard was now considering a move back into the naval construction market with the bid for Royal Navy aircraft carriers, in partnership with other shipbuilding companies.
Mr Nielsen has also highlighted the problems caused to the global shipping and shipbuilding industries by the "aggressive pricing policies" of the South Korean shipyards, which had been made possible with the support of the International Monetary Fund. "South Korean dock capacity is now being filled by offering prices for standard ships which are lower than the materials can be bought for in open international markets," Mr Nielsen said, "leaving nothing for production, overheads, or profit."
He said he accepted that it was necessary to provide assistance to the South Korean economy following the Far East financial crisis, but it was unacceptable that this support should be detrimental to the rest of the world.
Mr Nielsen's comments came in the month that the Glasgow Govan shipyard owned by Kvaerner, was put up for sale, threatening the loss of up to 5,000 jobs. The company took the decision after a period of severe losses.
The Belfast yard is also facing problems because the fall in the price of oil to around $10 a barrel has led to a significant reduction in the capital available for oil exploration. "A reduced number of projects being pursued by a large number of potential yards will inevitably put pressure on both prices and performance," Mr Nielsen said. "Despite the tremendous workload generated by our current order book, it should be noted that all orders in hand will be delivered by the end of the first quarter of next year."
An estimated 2,700 new ships a year are likely to be built worldwide over the next decade, but few of them will be built in Britain which used to be the world's largest shipbuilding nation, but today does not even rank in the top 20.
