§ Mr. Denzil Daviesasked the Secretary of State for Northern Ireland, pursuant to the reply given by him on 24 April, Official Report, column 201, if he will explain whether the calculation of a possible cost overrun by Harland and Wolff when building the auxiliary oiler replenishment vessel will include a consideration of fixed costs as well as more direct on-costs; and if he will make a statement.
§ Dr. BoysonHarland and Wolff's tender price provided for direct labour and material costs and a full allocation of overheads. Calculation of actual costs on the contract will be on the same basis.
§ Mr. Denzil Daviesasked the Secretary of State for Northern Ireland what is the nature and extent of the subsidy available to Harland and Wolff for merchant shipbuilding and if it covers the yard's capital expenditure.
§ Dr. BoysonDirect merchant shipbuilding subsidy to Harland and Wolff takes the form of intervention fund grants at 20.5 per cent. of contract price of ships up to 70,000 dwt; 25.5 per cent. for larger vessels. Harland and Wolff also receive interest-free loans and other miscellaneous grants to fund its operating costs, including capital expenditure. In 1985–86 those grants and loans totalled £36.5 million.
§ Mr. Denzil Daviesasked the Secretary of State for Northern Ireland what criteria will be used to judge whether Harland and Wolff keep within, or exceed, their tendered cost estimate for the construction of the first auxiliary oiler replenishment vessel.
§ Dr. BoysonActual costs incurred on the contract will be monitored and compared with the detailed breakdown of estimates included in Harland and Wolff's tender.