£1.25bn Navy deal for five frigates seen as 'a lifeline' for shipyard
Harland & Wolff has been thrown a lifeline after a £1.25bn deal for Royal Navy vessels went to an aerospace and defence giant which had linked itself to the Belfast shipyard.
Babcock, in partnership with defence firm Thales, was yesterday named preferred bidder in the race to build new Royal Navy frigates - news described as "a huge boon" for east Belfast by MP Gavin Robinson.
The five ships will be assembled at Babcock's Rosyth Dockyard in Fife, but are to involve supply chains throughout the UK.
It is hoped that H&W, which has been in administration for over a month after prolonged financial difficulties, will be able to profit from opportunities for subcontracting work from Babcock.
Business advisers BDO, the administrators for H&W currently in talks about a sale of the shipyard, said they would not be commenting.
Around 120 staff are employed by H&W, though they are not currently being paid. However, many have been maintaining a protest at the gates of the business, calling for a State rescue.
Last year Babcock announced it would bid for the work in collaboration with Thales, H&W, BMT and Ferguson Marine.
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Now Babcock, working with Thales, has emerged as the preferred bidder - though it is yet to confirm that it will be working with the parties named last year.
But if selected, industry sources suggest H&W would be engaged in steel fabrication for around five years.
The Government has pledged to buy at least five of the warships, which have a production cost of around £250m each. However, it's hoped that more orders could be placed.
Babcock said the programme would require a workforce of 1,250 in "multiple locations throughout the UK" with another 1,250 roles supported in the wider UK supply chain.
Senior economist Dr Esmond Birnie of Ulster University said: "Going back to the middle of the last century H&W has a long history of constructing naval vessels, but in recent years missed out on being part of the group which built two aircraft carriers for the Royal Navy.
"H&W would provide the fabricated steel for the five ships. That work could last for five to six years but it is unclear how many jobs would be secured by this activity - H&W currently have about 120 staff.
"The most optimistic scenario is that the Babcock group will subsequently win export orders for these frigates. If that happens then there could be a lot more work for Belfast.
"Notwithstanding the news about this order, H&W remains in administration."
Babcock is expected to confirm the names of the sub-contractors it will work with on the deal at a later date.
Lord Empey, who is a member of the All Party Parliamentary Group on Defence, said he was delighted at the news, which he said could place H&W "back at the centre of UK shipbuilding".
"However, a lot will depend on who the administrators choose to sell the shipyard to. It may be that a bidder is only interested in the outfitting quay and can dispose of some of the land," he said.
Unite trade union officer Susan Fitzgerald said the news was "welcome" and highlighted that Belfast had a viable future as a shipbuilder.
DUP East Belfast MP Gavin Robinson said the news was "very significant". He added: "As the administration process within H&W continues and does so positively, this announcement will be a huge boon for the workforce who have admirably and steadfastly stood with the yard, knowing the potential ahead."