SWAN Hunter will be in trouble if the yard has to wait much longer over a £4bn contract to build giant aircraft carriers for the Royal Navy, the MoD was warned yesterday.
Kevan Jones, Labour MP for Durham North, raised the alarm after defence procurement minister Lord Drayson confirmed the December deadline for the decision had been scrapped.
However, the Tyneside shipbuilder said last night that, at worst, its Wallsend yard could be mothballed, although it hoped to secure more work.
In evidence to a committee of MPs, Lord Drayson refused to set a fresh target date for work going out to tender on the aircraft carrier project, and revealed the full extent of the crisis gripping the project by also abandoning the long-standing target to put the first carrier in the water by 2012.
He told the committee that the complexity of the "alliance structure" under which yards will co-operate to build the ships, was responsible for the delay.
Mr Jones praised the minister for his honesty, but warned: "If it is delayed much longer, some of this capacity will go bust."
The decision over which yards will build the carriers is crucial to Swan because its order book will dry up after two Royal Fleet Auxiliary vessels are completed.
As one of four shortlisted companies, the project was expected to create about 3,000 jobs at Swan's Tyneside and Teesside yards, sustaining at least another 8,000 in the wider supply chain.
Swans project manager John Mitchell said the delay had come as no surprise and the 2012 date became unrealistic after so many setbacks.
He said: "We don't know what's going to happen in the future. We are trying to get work in the yard but if we don't then we will have to bring it down to a low level of hibernation."
Swans, whose workforce of 600 is falling month-on-month, is hopeful of winning a contract with Allseas to build a pipe-laying vessel, and is in talks with a major oil and gas company about converting a floating platform.
Mr Mitchell warned that mothballing the yard would lead to skilled workers leaving the region in search of jobs in the South.
He said: "It won't do the North-East any favours and that's why, sometimes, politicians have to turn around and see the bigger picture."
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article