Swan on scent of work

THE FRENCH company Constructions Mecaniques de Normandie, close to making a last-minute rescue of Swan Hunter, decided to pursue its interest after the defence secretary Malcolm Rifkind confirmed that a potentially lucrative batch of naval contracts will definitely go ahead, and said he would like the Tyneside shipyard to bid for them.

CMN, run by Lebanese born Iskander Safa, came to an agreement last week with Price Waterhouse, Swan's receivers, under which it will pay the wages of the 100-plus design and estimating staff - either until it has built up enough orders to keep busy for two years, or until it decides to withdraw.

Fred Henderson, who runs CMN's British operation, said on Friday that the company is likely to decide in the first quarter of next year whether to go ahead with the purchase.

Mr Henderson said that 14 July, the day the Government gave the refit contract for the Sir Bedivere to rival yard Rosyth, also brought encouraging news. First, the MoD finally announced that CMN was a suitable company to take over work on the frigates now being finished off by Swan.

Second, Swan was awarded the pounds 6m contract to refit the fleet auxiliary Olwen. Though this seemed bizarre, given the likelihood that it would not be able to take on the order - it has since given it up - it gave CMN confidence that the MoD was prepared to offer work.

Third, Mr Rifkind said tenders would be placed for two new Royal Marine assault ships as well as three Type 23 frigates and up to six nuclear submarines. Swan is currently working on T23 frigates, and is one of only two UK yards capable of building assault ships.

Although these contracts were first announced a year ago, Mr Henderson said the number of recent defence cancellations meant it was unwise to assume they would go ahead. Following the confirmation, he met Mr Rifkind 'who went through the list of contracts and said he would welcome us tendering'.

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