THE proposal to dismantle the Ravenscraig steelworks and ship it to

north-east Malaysia appears to have run into financial problems.

Last March, a privately-owned Indonesian company, PT Gunawan Dianjaya,

confirmed plans to buy the 2,200,000 tonne Ravenscraig facility and

relocate it in Asia.

There was talk of the #525m deal being signed within months and the

slab plant coming on stream in Malaysia by mid 1995. But, since

Scotland's Business broke that news, nothing has happened.

It now appears that the Indonesians are struggling to raise the

enormous capital needed for the project to proceed, now put at nearer

#800m than the #525m suggested last year. That is still roughly half the

cost of building a new 2,000,000 tonne capacity steel plant.

Only a fraction of that #800m would be needed to buy the Ravenscraig

equipment and ship it east. But, without banks and other financial

institutions committing themselves to the whole amount, the project

cannot proceed.

Meanwhile, weather-sensitive equipment is being mothballed at the

Motherwell works, to prevent any deterioration as the Indonesians'

search for financial backers continues.

British Steel is having no better luck selling other equipment located

at the Hunterston ore terminal on the Ayrshire coast. The terminal

itself is now owned by Clydeport, which is using it for the

trans-shipment of coal.

But, although it has attracted various expressions of interest,

Hunterston's two direct reduction plants, which convert ore into iron

pellets and are still owned by BS, have yet to find a buyer.

The direct reduction machines were never brought into production since

their installation in the late seventies. One interested party has been

prepared to invest a six-figure sum in a study to check whether they

would still work.