Bleak future for shipyard as MoD contract is lost

The future of the Kvaerner Govan shipyard on the Clyde and 1,200 jobs were under threat last night after the loss of a crucial pounds 200m Ministry of Defence order. The Secretary of State for Scotland, Michael Forsyth, who had pledged to do all he could to secure the contract for two Royal Navy tankers, came under fierce attack.

Sigbjorn Ellingsen, managing director of Kvaerner Govan, described the decision to award the contract to GEC Marine's VSEL yard at Barrow-in- Furness, Cumbria, as a "severe blow". He warned that up to 1,000 jobs would be lost by the end of the year. Kvaerner took over the yard in 1988 and successfully carved out a niche for specialist commercial vessels. But the MoD said that the VSEL bid offered the "best value for money for the taxpayer".