UK shipyards last week won long-awaited Government support with the announcement that state aid will be extended to cover ship conversion work.
Competitiveness minister Alan Johnson told an industry forum that the Shipbuilding Intervention Fund (SIF) will now include up to 2.25% of the value of ship conversion contracts.
SIF grant aid from the Department of Trade and Industry previously covered 9% of the cost of new ship construction contracts.
The change will boost recovering British yards such as Cammell Laird in Birkenhead, which last month beat Italian rivals to win Europe’s largest cruise conversion deal – a £52m upgrade of the Costa Classica cruise liner.
The grant is to only half the 4.5% European Union level for yards in other countries. However, the Commission is due to axe aid at the end of the year for new builds and conversions across the union.
Nick Granger, chairman of the Shipbuilders and Shiprepairers Association, welcomed the decision, but said its impact on shipyards could be erased by the strength of the pound.