SHIPBUILDING COSTS

Press, Volume LXXXIX, Issue 27056, 3 June 1953, Page 13

SHIPBUILDING COSTS

LEVEL DESCRIBED AS FANTASTIC

“TIME TO HALT FOR A SPELL” (Special Correspondent N.Z.P.A.) LONDON, June 1

A warning to shipbuilders that they were pricing themselves out of the market was given by Sir George Christopher in his annual statement as chairman of the Union Castle Mail Steamship <Company.

"Shipbuilding costs, have reached fantastic levels," he said. "This has led us to the conclusion for 'the time being that there must be no embarking on a further building programme. "It would be extremely unwise for us to commit the company to the enormous outlay that would be represented by ordering further mail and intermediate passenger ships at prices on which it would be difficult to meet the necessary depreciation let alone provide a profit. We feel that the present is a time to halt for a spell.” Giving an illustration of the continued rise in costs. Sir George Christopher said that the Union Castle's latest mail ship built in 1948 would now cost twice as much, and an intermediate one-class passenger ship completed only Igst year would already cost 15 per cent, more tb replace. All told, the company’s fleet had cost £33,000,000. It would cost at least £82.000,000 sterling to replace at current prices. The city editor of the "Dally Telegraph” says: “When men of Sir George Christopher’s calibre decide on a buyers' strike the example is likely to be followed. The shipbuilding industry should take advantage of the breathing space provided by record order books to consider the problem of cutting its costs.” “The Times" comments: “In the present political and economic circumstances commercial prospects for shipowners are still beset with many uncertainties, particularly as regards freight rates, and it cannot be assumed that raw material and constructional costs have yet reached their peak. Although the price of fuel o 4 has fallen somewhat, the costs of virtually all essential materials of shipbuilding and operation are still too high to:.permit any feeling of confidence on the part of shipowners.”