Rosyth Dockyard stays, Babcock maybe not so much

Rosyth aircraft carrierworks CC BY-SA 3.0

By Russell Bruce

On cue from Boris Johnson the boss of Babcock threatened to move from Rosyth to England, threatening Rosyth’s workers with their jobs. Rosyth dockyard will not be moving and is crucial infrastructure on the East coast of Scotland and will continue to serve as a marine hub whether Babcock stays or leaves. Apart from UK defence contracts Babcock serves the marine industries in the North Sea; oil gas and increasingly renewables. There will be plenty of demand for the local workforce’s skills in the years ahead.

Just where in England they would move it to is not an easy question for Babcock to answer. Starting from scratch with a new facility would be very expensive. Their other existing facility is Devonport where they are already working through a £1 billion upgrade on facilities. Devonport is the largest naval dockyard in Europe and whilst being reconfigured to create new dry docks it is also a congested site where it would be difficult to increase the amount of work the site could handle.

Already undergoing a major reconfiguaration Devonport has little scope to expand in a crowded corner of the South West of England

Both Rosyth and Devonport were originally owned by the Ministry of Defence. In 1993 the MOD announced plans to privatise Rosyth. Babcock International was the only company to submit a bid and after protracted negotiations purchased the yard in January 1997. Because of Rosyth’s strategic position and importance to Scotland, an independent Scotland might well wish to consider taking Rosyth into public ownership again and work with a range of commercial companies serving the marine environment to build a communications, engineering, research and development complex for the 21st century.

An independent Scotland will require frigates, perhaps an odd destroyer as well as other defence and offshore energy support vessels. If Babcock wants to harness its future entirely to serve England that is their right but an odd position for a company that claims to be internationally focussed with operations in many countries around the world from New Zealand to Canada to Australia to South Africa. Babcock is active in our European neighbours too; Norway, Sweden, Spain, Portugal and France but it seems it is not interested in a future in Scotland. Babcock shareholders might not share the opinion of Rosyth’s boss.

Babcock had an Oil and Gas aviation business, headquartered in Aberdeen, employing over 500 people and operating around 30 aircraft across its three locations. Babcock sold this in September 2021.

Is it really Bye Bye Babcock?

They have a contract to build 5 Type 31 frigates for the MOD and have built infrastructure to accommodate working on two frigates at the same time. This has been a significant investment.

Babcock’s ‘frigate factory’ in Rosyth involved a £31.5 million contract to build the module hall. This project maintained 100 jobs, created five new full-time roles at contractor Robertson and supported a further 100 positions throughout Robertson’s supply chain.

The Type 31 contract for 5 ships is worth £1.25 billion to Babcock and is understood to be on extremely narrow margins. In order to recoop frigate factory costs and other investment at Rosyth it is understood Babcock would need either a second 5 ship MOD contract or obtain frigate work from other countries, winning export orders in a very tough international market.

Newsnet believes that Scotland will require 3, building to 5 frigates, to adequately patrol Scottish waters and take part in joint exercises with our European partners. Whether Babcock might be in the running for those contracts is another matter and would depend on the specification an independent Scottish government was looking for.

The ‘frigate factory’ has been completed and work has already started on the first Type 31. They are all due to be delivered by 2028 which is just 6 years away. These frigates will be built at Rosyth regardless of Scotland voting for independence because the cost of creating the specialised infrastructure from scratch elsewhere, say half way through, would make the whole programme a giant loss making venture to Babcock. The planning process for a replacement location would take several years alone. Shareholders would not be happy. Babcock HQ would not be happy. What was the name of the idiot guy who suggested Babcock would close Rosyth if Scotland voted for independence and cost us the chance of the Nicola Class 50 frigate contract?

Jobs at Rosyth have a long term and secure future. These are skills in short supply and independence will increase the long term future for Rosyth. Apart from current activities, Rosyth is a port with a big future in direct freight and passenger services to Europe as an independent Scotland sets about rejoining the EU.

Babcock also has a nuclear division – Cavendish Nuclear who recently gained a £20 million contract for decommissioning work at Dounray. Decommissioned nuclear submarines are currently ‘stored’ at Rosyth and Devonport awaiting final breakup. As these are MOD liabilities those remaining at Rosyth should be barged to Devonport for eventual breaking.

Babcock note Rosyth’s excellent connections on their website: “The site has excellent physical connections: Approximately 2,000m² of quayside for moving goods by sea, a railhead connecting to the East Coast Mainline, the M9 is just 2.5km away linking to the wider UK motorway network, and Edinburgh Airport is less than 30 minutes from the site.”

Newsnet believes an independent Scotland should take the site over as an national asset. Companies wishing to be involved in marine, defence, energy, R&D and European connectivy operations at Rosyth would be able to obtain renewable leases for their operations at Rosyth. Rosyth has a secure future in an independent Scotland. It is a vital asset where long term employment opportunities have a much brighter future than the constant insecurity of being a northern outpost of the UK solely dependent on uncertain defence contracts. Rosyth can become a diversified marine centre of excellence in an independent Scotland and has the potential to expand to meet Scotland’s North Sea marine objectives.