Competition receives mine-sweeper contract; Portship responds with more emphasis on the company's engineering division.

• Position: Lavalin Industries Inc.; Port Arthur Shipbuilding Company Ltd.

"There are hard times ahead for Ontario shipyards," predicts a somewhat dejected Wes Allan. "We're going to be struggling to survive."

The day before an interview with Northern Ontario Business Allan, the general manager of Port Arthur Shipbuilding Company Ltd. (Portship), learned that a half-billion dollar contract for the construction of 12 mine sweepers was awarded to Montreal-based Lavalin Industries Inc.

A Toronto subsidiary of Lavalin, Fenco Engineers Inc., won the contract. German Marine of Dartmouth, N.S. will design the ships, while Halifax-Dartmouth Industries Ltd. will construct them.

Portship's parent company, Canadian Shipbuilding and Engineering Ltd. (CSE) was vying for the much-delayed contract. Had the St. Catharines, Ont. firm won the contract, the ships would have been constructed at CSE's Port Weller, Ont. and Pictou, N.S. shipyards.

Portship would have received Port Weller's repair work for between seven and 10 years, according to Allan.

"It's hard to visualize the value of the business, but it would have kept us very busy," he said.

During the community's battle to influence the federal government to award the mine sweepers contract to CSE, Thunder Bay-Atikokan MP Iain Angus warned that Portship could close forever without the spin-off repair work.

Allan is not as pessimistic. However, he indicated that for Portship to survive, grain shipments from Thunder Bay's elevators must increase and the size of the Great Lakes fleet must not drop below its current level of 120 ships.

As of Oct. 19 the volume of grain shipped through the port this year had increased to 9.5 million metric tons from 5.9 million metric tons during the same period in 1990.

The port recorded the increase despite disruptions caused by strikes by the grain handlers and Public Service Alliance of Canada employees.

Overall the port had shipped more than 12.8 million metric tons of goods compared to 10.1 million metric tons of grain during the same period in 1990.

According to Allan, the increase in shipments means more ships are at the Lakehead, and the need for repair work increases.

"Business has been reasonably steady this year due to emergency repair work," Allan noted.

In late September Portship finished an eight-week repair of the freighter Halifax. The ship had...