Jobs threat at Cammell Laird as Classica refit falls through

Cammell Laird is urgently reviewing its contractual arrangements in the light of moves by the Italian owner of cruise ship Costa Classica to terminate a £50m refit deal with the company.

Ship owner Costa Crociere announced this week that it had concerns over the quality of the work and had appointed an arbitrator to look into terminating the contract or postponing delivery of the vessel, threatening up to 800 jobs at the Birkenhead shipyard.

When the work was won by Cammell Laird in September 1999 — in the face of intense international competition — it signed a contract drafted under Italian law that meant the yard would not be paid until the job was completed.

If the Costa Classica deal founders the Cammell Laird yard will seek several million pounds in compensation for work already carried out. The company is building a 45m-long mid-section to lengthen the liner. The section was floated on Monday, but work cannot continue until the Costa Classica arrives. While en route to Birkenhead, it was ordered to turn back to Genoa by its owner.

Cammell Laird managing director John Syvret said: ‘We do not know why they have turned the ship around as there have been two independent reports on the quality of work which have both been satisfactory.’