Shortage of orders has placed future of Harland and Wolff at risk

A spokesman for the Belfast shipbuilder, Harland and Wolff, has that said the very future of the yard is at risk due to the lack of orders and by problems arising from a dispute with one of its biggest customers. The yard said that the situation was a direct result of the actions of Global Marine in refusing to pay for work undertaken. A vessel completed for the company left the yard last week after a High Court judge granted an order allowing Global to take possession without first paying the final instalment of stg£23m.

Global claimed that the ships had not been finished to its satisfaction on time, a claim which the yard disputed. The court ordered that the disputed money be settled by arbitration. A hearing is due to be held on 5 September. The yard is also in dispute with Global over a separate sum of more than £100m sterling, which it says it is owed, because of a change in specification demanded by the US company during the construction of the drill ships. That argument is likely to roll on for several years.

Earlier, the Norwegian company which owns Harland and Wolff played down reports that the shipyard's future could be sealed today at a board meeting in Oslo. Trade union representatives had voiced fears that hundreds of redundancies could follow the meeting. However, a company spokesman said that it is unlikely that any announcement will be made today. He said that, because of the seriousness of the issues to be addressed, it could be sometime before the company would be in a position to make an announcement.

Harland and Wolff has admitted that it is in crisis, with no cash and little or no work. The core shipbuilding workforce was cut to 1,000 through the redundancy of hundreds of workers early in the summer. Those remaining are now on a two- or three-day week. Following a meeting with the main shareholder, Fred Olsen said earlier this week that the unions fear hundreds more jobs are about to go.

Olsen Energy is footing a wage bill for Harland and Wolff of around stg£2.5m a month, while efforts continue to confirm orders negotiated earlier in the year. The yard won an order worth stg£300m for four ferries, with options for two more, but certain conditions attached to the order have yet to be ironed out. It also has letters of intent for two cruise liners worth stg£200m, but these, too, have not been turned into a firm order.

Amid the financial crisis, Olsen Energy is expected to decide today whether it can continue to pour money into Belfast without any sign of a return. The yard says that it is working to tie up the contracts it signed and hopes to have them secured within a few weeks. It remains to be seen whether Olsen is prepared to wait that long without making further job cuts or even putting the yard into mothballs.