The future of Belfast shipbuilder Harland & Wolff is hanging in the balance after it failed to win a £400 million sterling order to build the world's largest cruise liner. The contract to build the Queen Mary II is set to go to a French company which has signed a letter of intent with the American owners, Cunard.
Provided the final contract is agreed in three months the liner will be built by Chantiers de l'Atlantique. It is believed the bid from the French company could have been as much as £90 million lower than that put forward by the Belfast yard.
However, a spokesman for Harland & Wolff said last night: "We are obviously disappointed and now have to consider the implications of the decision, but the battle on the part of the company to bring future work and guarantee the company's future is far from over."
East Belfast MP Peter Robinson, who is expected to have urgent talks with the firm's management, said he was shattered by the announcement. "I am gutted. It's a devastating blow for the thousands of people who depend on Harland & Wolff for their livelihoods.
"It is obviously the best and most important opportunity for the long-term future of the yard and there are some people who will tell me of my refusal to face up to reality. But I'm not prepared to give up."
The British government and Northern Ireland politicians had been lobbying the Cunard cruiseline company to award the contract to Harland & Wolff, after the yard issued 90-day redundancy notices to most of its 1,800 staff on Wednesday.
The Department of Trade and Industry confirmed it had, in principle, agreed to guarantee a finance package in relation to the building of Cunard's Queen Mary II, billed as the world's largest cruise liner.
The DTI Secretary, Mr Stephen Byers, yesterday held meetings with H & W's owner, Mr Fred Olsen, and local representatives to inform them of the government's package.
While details of the package are confidential, the government's guarantee would provide loans of 80 per cent of the contract value of the ship during construction. The money would be repaid on completion of the contract and payment by Cunard.
While welcoming the package, sources close to H & W said the deal was "nothing out of the ordinary" and fell somewhat short of what the yard had expected.
Several of the unions are understood to have agreed to a no-strike deal and pay freeze demanded by management. It has been speculated that the issuing of redundancy notices was a way of putting pressure on the unions to agree to the extremely tight conditions necessary to win the Cunard deal. The Northern Ireland Minister for Trade and Enterprise, Mr Adam Ingram, said the package was the result of "tireless" efforts by several government departments.
Mr Robinson, confirmed he held a lengthy telephone conversation with Mr Byers, in which the DTI Secretary had informed him of the package.
"While we know that Cunard will make its decision on a commercial basis, we are convinced that they want a British company to build the ship," Mr Robinson said. The DUP politician said there were also some practical criteria that might persuade Cunard to favour H & W over Chantiers de l'Atlantique. The president and chief executive of Cunard, Mr Larry Pimental, said yesterday the lack of "new build" contracts on the H & W order book was of serious concern to Cunard management.