The construction of three vital new warships for the Royal Navy faces significant delays due to a severe cash crisis at the Scottish steel mill contracted to supply the metal. Liberty Steel's Dalzell plant in Motherwell has been unable to begin full-scale production for a 34,000-tonne order, casting a shadow over the UK's flagship naval procurement project.
A Contract in Jeopardy
According to informed sources, the Dalzell works, owned by Sanjeev Gupta's GFG Alliance, lacks the cashflow to purchase the essential steel slabs required to fulfil its contract with Spanish shipbuilder Navantia. The order is for plate steel to construct three 216-metre Fleet Solid Support (FSS) ships for the Royal Fleet Auxiliary. These vessels, designed to carry munitions and supplies, are due to be built at the Harland & Wolff shipyard in Belfast, with the first, RFA Resurgent, scheduled for delivery in 2031.
The project was intended to bolster UK employment and supply chains. However, the financial troubles plaguing Gupta's empire since the collapse of its key lender, Greensill Capital in 2021, have now directly impacted this strategic defence contract. Workers at Dalzell continue to be paid 80% of their salaries, but production has effectively ground to a halt. Minor trial runs in November processed only about 1,000 tonnes—equivalent to roughly three days of normal output.
Calls for Government Intervention
The situation has prompted calls for the UK government to step in. Sir David Murray, the Scottish metals magnate and former owner of Rangers FC, has urged ministers to pressure Liberty Steel to relinquish control of the plant. Murray, who tried to buy Dalzell in 2015 before it was sold to Gupta, has previously told the government he is willing to take over the business.
"It’s a terrible error of judgment to remain idle," Murray stated, highlighting that the mill is just 17 miles from major naval contractors. He believes the plant could be profitable within two years with a £50 million investment for raw materials and working capital. The Scottish government previously lent Gupta £7 million to support the Dalzell purchase and promises to revive an aluminium smelter in Fort William—a loan that remains outstanding.
Broader Financial Turmoil and Scepticism
The cash shortage at Dalzell is a symptom of the wider and ongoing financial distress within Gupta's GFG Alliance. In August, he lost control of Speciality Steel UK in South Yorkshire after it was declared "hopelessly insolvent." The Dalzell mill itself has not filed accounts for five years, and Gupta faces prosecution for this failure alongside a protracted fraud investigation by the Serious Fraud Office.
Industry figures express deep scepticism over Liberty Steel's ability to restart production imminently. A restart would also provide a crucial boost for British Steel's Scunthorpe plant, which would supply the slabs. The UK government took control of British Steel from its Chinese owners in April and has since spent £274 million supporting the loss-making operation.
In a statement, a Liberty Steel spokesperson insisted the plant "is fulfilling" the Navantia order and that trial production runs "are expected to shortly resume." They pointed to "positive momentum" from the contract and argued that recent UK trade actions would help Dalzell compete against cut-price imports. Navantia UK declined to comment on the delays.
The standoff leaves a key component of the UK's naval renewal and industrial strategy in limbo, raising urgent questions about the resilience of critical domestic supply chains and the government's role in safeguarding them.
