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Anxious days as BAE launch Cardigan Bay.

Byline: By Guy Anderson

Naval giant BAE Systems launched the second of two naval vessels on the Clyde at the weekend.

The event highlighted the delays which have dogged construction of the sister ships on the Tyne, raising concerns over the future pounds 3bn aircraft carrier contract.

Cardigan Bay ( a 16,000-tonne Royal Fleet Auxiliary Vessel ( descended the Glasgow yard slipway on Saturday before a crowd of about 8,000.

It followed the launch from the yard 12 months ago of the Mount Bay sister ship. BAE and Swan Hunter's Wallsend yard are building four identical ships for the Royal Navy in a deal initially valued at pounds 300m.

However the project, led by Swan's, has been dogged by delays and cost overruns.

While both of BAE's ships have reached the water, Swan's first vessel ( the Largs Bay which was launched in June 2003 ( is still awaiting completion. The second, Lyme Bay, will not be finished until late next year.

Richard Scott, naval editor of industry magazine Jane's Defence, said: "It will be interesting to see how they get around this situation. Swan Hunter has acted as lead designer. BAE is just responsible for building two of the ships to Swan's design."

Swan Hunter won the pounds 160m contract to build the Largs Bay and Lyme Bay in December 2000.

It was widely celebrated, coming as it did just five years after chairman Jaap Kroese pulled the yard back from the brink of collapse.

However, in December 2003 northern business daily revealed the depth of problems associated with the project. The vessel left a major dent in the balance sheet.

Problems adapting an off-the-shelf Dutch design to Ministry of Defence requirements sent losses spiralling.

MoD chiefs agreed late last year to renegotiate the contract with an additional pounds 84m.

Swan's is preparing to work with BAE Systems again from 2008 when the pounds 3bn aircraft carrier contract begins ( the biggest naval project since the Second World War, which is on course to create 3,000 jobs on the Tyne.

BAE launched the Cardigan Bay from Govan on Saturday, a day later than scheduled, because of poor weather.

BAE Systems naval ships managing director Vic Emery said: "The launch was flawless and a testament to the skills and professionalism of all involved.

"This ship, and the others in construction, demonstrate our capabilities as a 21st Century business."

Swan Hunter has reduced its staff in recent months as work on the Largs Bay draws to a close. In a year the payroll has slipped by around 400 to 550. The yard has an empty order book between the Lyme Bay launch in 2006 and work on the carriers beginning in 2008.
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Publication:The Journal (Newcastle, England)
Geographic Code:4EUUK
Date:Apr 11, 2005
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