In the Herald today:
Leaving aside the deep and dark irony of a so-called socialist attacking a deal to save jobs and shipbuilding facilities and to enable a Port Glasgow yard to develop a head-start on LNG ferries (link below), this builder’s refund guarantees business is a nothing and they probably know it is but will use it to attack the SNP he hates for replacing him and his party.
We saw in April, just how sleekit Scottish Labour can be when even the GMB could take no more of it.
What is the ‘normal builder’s refund guarantee?’
The purpose of the refund guarantee is to provide the buyer with a safe option to recover the instalments already paid in case the shipbuilding contract is terminated due to the builder’s default and the ship is not delivered.https://www.bimco.org/contracts-and-clauses/bimco-contracts/refund-guarantee-for-shipbuilding-contracts
One, it’s not ‘normal.’ Across the globe, to protect their national industries, government’s like that in China, will not insist on them or will expect banks to cover the cost knowing that 1 in 3 of their yards cannot meet contracts on time: https://www.reuters.com/article/uk-china-shipping-refunds-insight-idUKBREA350N020140406
Two, US corporate law firm Haynes Boone reveals the often worthless nature of these:
The buyer’s position is made worse by the fact that many shipbuilding contracts provide that, where the buyer terminates the shipbuilding contract for delay, the buyer is entitled to a refund of the pre-delivery instalments of the contract price, plus interest, but the yard has no further
liability to the buyer. In circumstances where, after cancellation of the shipbuilding contract, the buyer will have to find another much later slot at another yard for a higher price, a refund of the pre-delivery instalments plus interest will not compensate the buyer for its losses arising out of the yard’s breach.
As explained above, in a rising market, the buyer may be very reluctant to terminate the contract, particularly if the buyer will only receive a refund of the pre-delivery instalments ofhttps://www.haynesboone.com/-/media/project/haynesboone/haynesboone/pdfs/practice-group-pdfs/shipping/hb_affinity_shipbuilding_booklet.pdf?rev=2f7369434c5941c98fe3501e061b74ac&hash=BCCA9A9CD842A5F8D039B02ACF0C8419
the contract price, plus interest. This will not compensate the buyer for the additional costs it will incur placing another order at another yard for a higher price, and the profit that the buyer will lose as a result of the very significant delay in obtaining the ship. In these circumstances, the termination right provided to the buyer may provide very limited protection in reality.
5 thoughts on “Scottish Labour betrays the shipyard workers of Scotland, again”
Does this ”Refund Guarantee ” also apply to MSPs as the Labour voters who thought they were electing Labour MSPs got Baillie and Sarwar instead !
Surely an open-and-shut case for a refund !
LikeLiked by 2 people
The GMB letter to Sarwar, “……if the Labour party wish to reconnect with the working class….” Dear oh dear what a comment rightfully addressed to the so called worker’s party.
LikeLiked by 1 person
Why would anybody with any sense listen to a word from Richard Leonard. He has a brass neck to comment on anything after leading the fight to prevent female council empoyeees in Glasgow claiming their correct pay.