Ruling gives kiss of life to Belfast yard
Beleaguered Belfast shipyard Harland and Wolff PLC will begin a life-saving corporate restructuring following an arbitration panel's ruling yesterday that the company is owed more than $31 million by US drilling contractor Global Marine Inc.
LONDON�Beleaguered Belfast shipyard Harland & Wolff PLC plans to begin a life-saving corporate restructuring following an arbitration panel's ruling yesterday that the company is owed more than �23 million by US drilling contractor Global Marine Inc.
Harland & Wolff said the outstanding sum�the final installment in a staggered series of payments covering construction of the deepwater drillship Glomar Jack Ryan, the second of two being built under contract for Global Marine�would "provide an opportunity to establish a profitable, viable, and sustainable offshore and shipbuilding industry in Belfast."
Brynjulv Mugaas, Harland & Wolff's Chief Executive, said the ruling was a vindication of the parent company Fred Olsen Energy ASA's belief that the yard's final workscope had been in "complete accordance with the [original] contract."
"This ruling brings to an end the deplorable and thankfully futile attempt to bankrupt Harland & Wolff by withholding the delivery installment due," said Mugaas, "[and] has galvanized our determination to succeed in the expected arbitration to recover the balance of monies due by Global Marine for work completed."
He added that �65 million of Harland & Wolff's claim had been paid on account. Under yesterday's ruling the �31 million is due to be paid by Sept. 28.
A spokesman for Global Marine said the driller had no plans at present to appeal yesterday's ruling but noted that the larger claim�linked to cost overruns which Harland & Wolff claim were the result of design changes demanded by Global Marine�was seen, "except for small amount of steelwork, to be totally without merit."
Harland & Wolff filed a �133.2 million claim against Global Marine in 1999 after the two companies had a difference of opinion as to changes to workscope and delivery specifications during the construction of the drillship Glomar C.R. Luigs, the Jack Ryan's predecessor, at Harland & Wolff's Queen's Island shipyard.
Mugaas said he hoped the arbitration's outcome would restore market confidence in Harland & Wolff by "reducing uncertainties" as to its future, and help it to bring "potential major orders to fruition."
Harland & Wolff is now to map out a business plan that will "demonstrate the viability of continuing shipbuilding and engineering on Queen's Island," though it acknowledged any restructuring program would involved a "significant reduction in the number of employees" at the yard.