UK based start-up cruise line Luxus Cruises is today reported to have again ordered two small luxury cruiseships. This time from Cammell-Laird, builders of the WINDSOR CASTLE. A few months ago the same company plave a Letter of Intent with Belfast Shipbuilder Harland & Wolff for the same order. This LoI now seems dead.It remains to be seen whether any actual shipbuilding will result from this latest news.The following is a report which appeared in the UK newspaper Financial Times.
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Cammell Laird lands £344m cruise ships contract
By Juliette Jowit and Chris Tighe
Published: November 1 2000 21:38GMT | Last Updated: November 1 2000 22:23GMT
Cammell Laird, the ship repair and conversion company, has signed a contract to build two cruise ships which would be the first to be made in the UK for more than 25 years.
The deal, thought to be worth up to £344m, is conditional on government subsidy for the yard and loan guarantees for a start-up cruise company, Luxus.
A Department of Trade and Industry official said the department was processing applications for support from Cammell Laird and Luxus "urgently". Les Royle, chief executive of Luxus, described the group as a consortium of senior cruise industry figures. They include Jim Davis, a former director of P&O and now chairman of the International Marine Industries Forum and Luxus.
The Cammell Laird contract is Luxus's first venture, but people at Cammell Laird and DTI said they were satisfied with the company's credentials. "The contract is for two ships, and if that's successful we'd want to take an option for two more," said Mr Royle. If the contract proceeds, it should come as a big boost to British shipbuilding, taking it back into one of the most lucrative and fastest growing markets in the world.
UK shipbuilding has seen its market share decline from nearly 38 per cent of the world market in 1950 to less than one per cent today. The last cruise liner built in the UK was the Vistafijord, by Swan Hunter on the Tyne, in 1973.
Cammell Laird, which last week lost a £300m contract for six army ro-ro ferries to rivals in Britain and Germany, is expected to share the work between its yards on Merseyside, Tyneside, Teesside and Gosport on the south coast.
Brett Martin, Cammell Laird's deputy chief executive, said: "The key thing now to winning this contract is DTI support and we are very, very confident if they come up with the support we can deliver."
Last week Stephen Byers, the trade secretary, raised hopes by telling Cammell Laird workers: "There are two very big orders that could come to Cammell Laird's in the near future. My department is working to ensure orders come to Merseyside."
The contract is believed to be for two 28,000-ton, 400-berth luxury cruise ships.
Building work could be worth more than £206m but the total contract, including lifetime maintenance and repairs, could be worth more than £344m.
Cammell Laird is expected to bid for the maximum 9 per cent of the ship's cost from the DTI's shipbuilding intervention fund, which closes at the end of this year.
The deal would mark another stage in the recovery of Cammell Laird, which closed in the early 1990s. Since the original Merseyside yard was acquired by new management in 1995, the company has expanded in the UK and Europe, and has an order book of at least £10m.
Luxus, which earlier this year talked to Harland & Wolff, is also likely to ask for mortgage guarantees for up to 80 per cent of the build cost, also from the DTI.
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Terry Donegan