LONDON, UK - A British family firm wants to
end the forlorn sight of Royal Navy warships being torn apart for scrap on
foreign beaches.
Swansea Drydocks is competing for the
contract to break up three decommissioned British frigates and is hoping to
beat foreign competition - primarily from Turkey.
The company is bidding to recycle the Type
42 destroyers HMS Edinburgh, HMS Gloucester and HMS York, but is facing an
uphill battle on the soon to be announced contract because of cheaper labour
costs abroad.
In addition to lower labour costs, foreign
scrap yards also have the advantage of less onerous environmental controls than
those in EU countries, allowing countries such as Turkey to offer much better
rates.
Swansea Drydocks last year secured the
contract to scrap Type 22 frigate HMS Cornwall, but the Ministry of Defence
publicly admitted that the deal only went to a UK ship-breaker to test whether
the country had the ability to dispose of naval vessels.
The Royal Navy prefers not to scrap its
decommissioned nuclear submarines abroad to safeguard the technology they
contain, but few other warships have been broken up within the UK.
According to Karl Dunn, managing director
of Swansea Drydocks, since 2008 contracts to more than 15 Navy vessels -
including Falklands war veteran aircraft carrier Invincible and her sister ship
Ark Royal - have gone to Turkish shipyard Leyal Gemi Sokum.
Those contracts represented potential
turnover for the shipyard of more than US $300-million at today's scrap metal
rates.
The company was set up in 2009 with a view
to meeting incoming EU controls to recycle ships in the most environmentally
friendly way.
SDL breaks them up in dry dock, which is
recognised to be the best practice, whereas in Turkey the ships are more
commonly run up onto the beach and torn apart.
"We can break up ships in the way that
is recognised as best practice but we are losing out because we do it that
way," says Dunn. "We scored very highly in the technical side of the
last contract but lost out on the financials because we can't compete with the
cheaper labour costs abroad."
He added that while SDL might offer less
money to the MoD's disposal arm to buy the ships for scrap, breaking the
vessels up at home represented trickle down value to the economy through the
work they create and taxes paid to the government.
The Ministry of Defense has responded,
however, saying that it is "bound by the principles of the Treaty on the
Functioning of the European Union (TFEU)" and could "not discriminate
on grounds of nationality and must treat all competitors equally".
"The Government is saying under EU
rules it has got to be a fair competition to win these deals but what has Turkey
got to do with Europe? It's a candidate member," says Dunn.
Source: big
news net work. 12 April 2015
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