Swan Hunter in price wrangle

THE MINISTRY of Defence was accused of pulling the plug on Swan Hunter after claims that it reneged on a crucial part of the rescue deal being put together by Soffia-CMN, writes Russell Hotten.

With less than a week to go before the deadline to save the bankrupt Tyneside shipyard, the MoD has changed the price it is prepared to pay CMN to complete the only remaining work, on HMS Richmond.

The ministry wants the proposed pounds 57.7m contract reduced by pounds 700,000. This has prompted accusations that the Government is penny-pinching while 630 jobs are in the balance.

The price was agreed on 19 July, after which CMN struck a deal with the receiver to keep the yard open while further work was sought. That arrangement needed clearance from the MoD.

An MoD spokesman said yesterday that circumstances had changed since 19 July. There was now less risk to CMN as much more work had been completed on the ship. Also, CMN was no longer willing to buy the yard outright after the Sir Bedivere contract was given to the Rosyth yard in Scotland.

CMN denied the MoD's claim that it had refused to negotiate on the price.

A spokesman for the French company said: 'We thought we had a deal. The MoD appears to be trying to make extra money out of a desperate situation.'