asked the Secretary of State for Northern Ireland whether he is yet in a position to make an announcement about further orders for Harland and Wolff Limited.
Yes. Agreement has been reached in principle on financial arrangements to enable two liquefied petroleum gas carriers, each of 58,000 cubic metres—together worth between £60 million and £70 million—to be ordered from Harland and Wolff by a leasing company for long-term charter to Shell. The final prices of the ships and other details are still the subject of negotiation, and must remain confidential. But the House will wish to know the basis on which agreement in principle has been reached.It is intended that a joint venture leasing company will be set up whose ordinary share capital will be owned by United Kingdom banks. Harland and Wolff will invest in the leasing company to the extent of £12 million in the form of redeemable preference shares, to be financed by the Northern Ireland Department of Commerce which is the sole owners of Harlands. The preference shares will earn a cumulative, but not compounded, dividend of 7½ per cent. a year, and it is expected that they will be redeemed out of the sale proceeds of the ships at the end of the lease. In addition, the ordinary shareholders will from time to time be expected to make loans available to the leasing company up to a maximum of £14 million. The leasing company will have access to normal credit terms under the Home Credit Scheme for shipbuilding. It will also benefit from the tax incentives generally available for leasing operations, namely the 100 per cent. first year capital allowances for the expenditure on the construction of the ships, the benefit of which will be accelerated through group relief.The EEC Commission has been notified.This is an important contract, involving new technology, which will provide work for 2,000 men for two years.