Mr. Milianasked the Secretary of State for Trade and Industry whether there have been any cash payments to Trafalgar House, directly or indirectly, in respect of its purchase of Scott Lithgow, since the answer of 9 April, Official Report, column 19; and whether any additional payments are now anticipated.
§ Mr. Butcher[pursuant to the reply, 18 December 1984, c. 127]: Under the terms of sale of Scott Lithgow, British Shipbuilders (BS) has contingent liabilities in respect of:
- (i) certain sub-contracted steelwork for the Britoil rig, whose quality was in doubt. Payments totalling £1 million have been made and a further cost of £1 million is expected to arise;
- (ii) benefits, equivalent to the shipbuilding redundancy payments scheme, to a maximum of 1,600 workers who might be made redundant within a year of the sale.
253 Payments totalling £400,000 have been made so far. Further costs will depend on the extent of further redundancies; - (iii) any additional costs arising from the settlement of the completion accounts relating to the sale.
Agreement has yet to be reached and it is not possible at this stage to forecast what, if any, payments will be necessary. In addition, and also under the terms of the sale, BS had paid £16 million in liquidated damages to BP in respect of the late delivery of the oil rig almost completed by Scott Lithgow and currently undergoing sea trials.
BS will also receive this year £3 million from Trafalgar House as part of the £12 million consideration to be paid over four years.