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Jon Excell
Forgemasters cut puts brakes on UK's nuclear ambition
When The Engineer spoke to Sheffield Forgemasters ahead of last month’s election, its CFO Neil Maskrey professed confidence that the - now cancelled - £80M loan was election-proof. ‘Our firm belief is that our funding is earmarked, ring-fenced and will weather an election…’ he said.
It’s easy to see why Maskrey assumed that no government would turn its back on such a gold-plated investment opportunity.
The loan - along with private funding - would have enabled the Sheffield firm to install a 15,000 tonne forging press: an enormous piece of equipment capable of building almost all of the components for not just the UK’s but the rest of the world’s next generation of nuclear reactors. The installation of the press would, in one move, have propelled the UK to the summit of the global nuclear supply chain.
‘Our firm belief is that our funding is earmarked, ring-fenced and will weather an election…’
Neil Maskrey, Sheffield Forgemasters
With the firm’s chief executive Graham Honeyman, yesterday vowing to focus on “other elements of the company’s development” the forging press plans are now stalled. Although given the compelling commercial case behind the facility it’s reasonable to speculate that private backers will step in to pick up the shortfall.
While it’s certainly disappointing to see the coalition turn its back on a project that promised so much for UK industry, it’s too early to accuse the government of reneging on its promise to place engineering at the heart of a rebalanced economy. Indeed, yesterdays bitter pill was sweetened with relief for other sectors of the UK’s technology economy. The £12 million International Space Innovation Centre in Harwell will still get the go-ahead and just over £30 million funding for the vital work being carried out at the Renewable Energy Centre (NaREC) in Blyth is good news for the UK’s burgeoning offshore wind sector.
The decision to cancel the Forgemasters loan is also sort of consistent with the coalition’s desire to see new nuclear entirely funded by the private sector.
We must all hope that the private sector steps in with these plans, because if it doesn’t the lights out scenario that so many energy experts have predicted will be a reality sooner rather than later.
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Readers' comments (32)
nick saxby | 18 Jun 2010 1:12 pm
Pah New Gov`mts
All Shiny Shoes and no substance
There was a good reason that UK manufacturing was re emerging during the last 12 years!
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Jonathan Douglas | 18 Jun 2010 1:31 pm
I can see that this loan cancellation is a disappointment, but there should be other sources of such loans if the business case is good. In so far as UK manufacturing has been re-emerging during the last 12 years, it is not thanks to the Blair or Brown governments but simply because there are some things that UK manufacturing does better, and overseas sourcing is not effective. I'd even go so far as to say that the Mandelson loan was a piece of blatant politics and had little to do with real support for industry.
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David Smith | 18 Jun 2010 1:34 pm
This decision is an indication of the amount of weight Nick Clegg has in the coalition. If he can not protect the jobs of voters in his own constituancy then how much say do the Lib Dems have in this government?
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Nicole Ballantyne | 18 Jun 2010 1:34 pm
Shame on you Nick Clegg - the notable 2 investments that have been axed are both in Sheffield - Forgemasters, and Outukumpu.
Short sighted in the least, and very disappointing for UK Industry.
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David Robson | 18 Jun 2010 1:40 pm
We need to realise just how badly off the UK (and the RoW) is! This is simple maths now. If we don't have it in pocket then we can't afford it.
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Clive Walter | 18 Jun 2010 1:46 pm
The number of providers throughout the world of the kind of steel product that Forgemasters so expertly produce is very limited and if government cannot provide money then they should give every possible assistance to smooth the path for those who can to avoid leadtimes becoming even more excessive. As a CEGB engineer, I was responsible for the last order of strategic header material from Forgemasters. Our order went through the plant immediately after Sadam Hussain's cleverly disguised and well publicised gun barrels.
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Garry Turner | 18 Jun 2010 1:48 pm
The only problem is that it appears to have been taken out of Engineering's pocket to be put in the banker's pocket.
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Mike Byrne | 18 Jun 2010 2:01 pm
Whatever the political slant on the loan to Forgemasters there is no doubt that the company is viable and can easily repay the loan because the business plan would have been closely scrutinised. Surely this is a good time for one of our banks, who are stuffed with taxpayers cash, to step in and offer a loan on the same terms? This action will play well compared with the scandalous loans made by RBS to allow the takeover of Cadbury by Kraft.
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Rod Leyland | 18 Jun 2010 2:04 pm
What happened to the Conservative (Cameron) pledge to re-focus upon manufacturing? This was a great opportunity to become a major player in this sector. Remember also this was a loan that would be re-paid in due course. How many billions did the banks get yet we can't manage a mere £80 million? The RoW will be rubbing their hand with glee at yet another own goal from UK plc.
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tony Essex | 18 Jun 2010 2:19 pm
What's wrong with borrowing from the banks like the rest of us? Why should Forgemaster enjoy featherbedded loan facilities when the rest of us have to graft for it? If the project is viable then the funding will surely follow; keep at it!
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