A SOUTH Tyneside ship repair yard's share of a £200m Ministry of Defence contract will be less than had been hoped, it emerged today.
The A&P group, which operates A&P Tyne at Hebburn, is a preferred bidder for the Government order along with Northwestern Shiprepairers and Shipbuilders of Birk-enhead.
The Ministry of Defence has indicated that the bulk of the work will go the Birkenhead company, however.
How the contract is divided up will not be officially announced until June next year, but it is understood Northwestern will receive an estimated 140m of the work, with the A&P group taking the remaining 60m.
Today Dave Skentelbery, A&P's managing director for North East England, expressed disappointment at the expected decision, but he pledged to bring more contracts to the yard.
The order will involve essential maintenance work on a 17-strong fleet of ships, including support tankers, fleet replenishment ships and an aviation training ship.
It is expected that Northwestern will be allocated work on 12 of the vessels, with the A&P group receiving a contract for the other five.
Work on the five ships will be divided between A&P's Hebburn and Falmouth yards, and Mr Skentelberry believes the Falmouth yard will carry out the majority of the work for the A&P group.
He added: "It's disappointing because we wanted to receive the bulk of the work, but it went to competitive tendering and we were beaten. That's what can happen. It's also particularly disappointing because the customer has expressed delight at the work we have done for it in the past.
"I think it will mean a maximum of 5m a year to A&P Tyne over five years.
"It's not the end of the world, but we had hoped for a bigger share. Now it's important that we find other work."
A&P Tyne currently employs about 230 permanent staff but can see that increase to 600 during larger contracts.
How the new MoD contract will affect workforce numbers is not known.
News of the upcoming contract follows the completion by A&P Tyne of work on the fleet replenishment vessel the RFA Fort Austin.
Jackie Woodall, senior organiser with the GMB union, said: "I'm surprised A&P came second in the bidding, considering the quality of its workforce.
"There is an element of disappointment, but it's good news that work has been secured for the Tyne."
Minister for defence and support Baroness Taylor said she was looking forward to the new contract being signed next year once final negotiations have been completed.