Troubled Scottish steel supplier raises questions over Royal Navy contracts

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Liberty Steel Dalzell plant in Motherwell with order for 34,000 tonnes of metal plate to build three warships has struggled to pay billsThe Royal Navy is facing questions over…

Liberty Steel Dalzell plant in Motherwell with order for 34,000 tonnes of metal plate to build three warships has struggled to pay bills

The Royal Navy is facing questions over whether three new warships will be built with British steel as its Scottish supplier faces deepening financial difficulties.

Liberty Steel Dalzell, a plate mill in Motherwell, has struggled to pay its bills and workers in recent weeks, according to several people with knowledge of operations.

The government said it was “closely monitoring” the situation at the plant, amid growing concerns over its survival.

The National Energy System Operator (Neso), the government body in charge of keeping the lights on, filed a winding up petition against the company last month, according to public court records. It is understood that its debt, thought to be for electricity transmission charges, has now been repaid and the petition will be withdrawn.

The Dalzell plant has an order to make 34,000 tonnes of metal plate to build the navy’s fleet solid support (FSS) ships. They are due to be built in Belfast by the Spanish state-owned shipbuilder Navantia in a £1.6bn contract.

The financial struggles of Liberty Steel Dalzell and its owner, the Gupta Family Group (GFG) Alliance controlled by the metals tycoon Sanjeev Gupta, have cast doubts on whether the plates will ever be made. The Dalzell mill is the only one in Britain capable of producing the plates needed, but its output has been limited for two years because of shortages in working capital.

The first of the 216-metre FSS ships, designed to carry munitions, food and other supplies for the navy’s Royal Fleet Auxiliary, is planned to be delivered in 2031. The contract was awarded to Navantia in the hopes of revitalising Belfast’s historic Harland & Wolff shipyard that built the Titanic.

Several people in the industry and unions believe Dalzell could be part of an integrated British supply chain if it had working capital.

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