MoD delays Devonport decision

Government plans to privatise Devonport Royal Naval Dockyard were said to be in chaos last night after the Ministry of Defence delayed a decision about the sale.

Although the MoD said Devonport would be awarded a huge contract to upgrade its facilities, there was no news of the expected sale of the yard to a US-led consortium. The yard has been chosen to re-fit Trident nuclear submarines, but critics say it can be done more cheaply at Rosyth, in Scotland.

Sources said that an MoD announcement had been delayed because of the pressure of government business, and it was possible that a statement may be made today.

It is believed that the Plymouth yard will be sold to DML, the current managers of Devonport, in which American-owned Brown and Root has a 51 per cent stake. Plans to sell the Rosyth shipyard, at Fife, to Babcock International are also expected to be announced soon.

Current management contracts for both yards, which were due to expire on Friday, have been extended. Labour said the MoD's plans were in tatters and accused the Government of playing politics with people's jobs.

David Clark, shadow defence secretary, said: "Ideology has completely taken over and chaos reigns. It is now really a question of how to maintain morale at the yards."

Jack Dromey, national secretary of the Transport and General Workers' Union, added: "This is the long-awaited announcement that never was. Clarity was promised, but confusion reigns."

A 1993 decision to award a pounds 5bn Trident submarine re-fit contract to Devonport, and slowly concentrate all other nuclear submarine maintenance there, was thrown in doubt last year. The Government revealed that Rosyth might have to be given the re-fit work because of extensive modifications needed at the Devonport nuclear docks.

Now the MoD has awarded Devonport with a further pounds 300m-pounds 350m contract to carry out the necessary docks conversion work. The contract is about pounds 100m more than had been expected. James Arbuthnot, defence procurement minister, said the MoD had signed an outline agreement with DML for the sale.