The last commercial shipbuilder on the Clyde has said it currently expects to lose more than £44m on a troubled CalMac ferry contract, creating “significant doubt” over its future.

Ferguson Marine Engineering Ltd (FMEL) said problems with two new dual-fuel vessels had significantly impacted the business and its ability to “continue as a going concern”.

READ MORE: Ferguson Marine threatening legal action over spiralling costs of CalMac ferry contract 

Posting a £60m loss for 2016, the firm also wrote down the value of the Port Glasgow yard to zero based on a “draft external valuation and estimated site clearance costs”.

In a Strategic Report accompanying its latest financial statement, Ferguson blamed the state-owned firm that ordered the ships for £97m in 2014, Caledonian Maritime Assets Ltd.

In a section titled “contract loss”, it said the loss provision at the end of December 2016 was £39.5m, but in further notes it said that “based on the latest project cost estimates the anticipated loss on the contract is expected to be £44,299,000.”

It said: “The Directors believe that post contract award, variations, interference and disruption caused by the customer have resulted in additional unforeseen costs.

The Herald: Nicola Sturgeon and Jim McColl

“FMEL are raising a contractual claim against the customer for these losses.”

It said the directors had commissioned independent claim specialists to review the contracts for both ferries and were “encouraged by the initial findings” in support of a price increase.

It said the claim for the extra costs would be submitted in January.

Until agreement was reached with CMAL, “no upside” to the contract would be included in the FMEL accounts, and the yard’s fixed assets had been “impaired to zero”.

It said “challenging market conditions and operating losses” in the year saw an impairment loss of £13,284,00 on all property, plant and equipment at the Port Glasgow yard.

Ferguson’s was bought out of administration in late 2014 by engineering tycoon Jim McColl, a Monaco-based billionaire who is one of Nicola Sturgeon’s economic advisers.

FMEL is ultimately part of Mr McColl’s Clyde Blowers empire.

The rescue saved 150 jobs, but the ferry contract quickly ran into trouble.

The vessels, known as 801 and 802, should have been delivered this year, boosting capacity on the Ardrossan-Arran route and Uig triangle, but have been delayed to next summer and spring 2020.

Mr McColl has repeatedly blamed CMAL for the hold-ups on the novel designs.

However in September, CMAL boss Kevin Hobbs told MSPs his firm was not at fault.

“We can judge that it will be costing an awful lot more… that is not our problem,” he said.

Mr Hobbs also took a swipe at Mr McColl, saying CMAL had been “extremely honourable” and hadn’t “moaned and groaned” about the contract in the press.

The latest FMEL statements appear in its annual report and financial statements for the year ending December 2016, which have only now been published, more than a year late.

Dated 14 December 2018, the accounts say: “The company’s trading performance in 2016 has been significantly impacted by the 801/802 contracts.”

FMEL has been loaned up to £45m of taxpayers’ money to help it with cash flow problems.

SNP ministers loaned the firim £15m in September 2017 at 15% interest

They says a review of the company’s forecast and associated risks up to spring 2020 assume completion of the contract, with potential cash flows problems ahead.

Current forecasts show a shortfall of £3.5m in May 2019 and a shortfall of £5m in February 2020 even if the yard gets new orders and there are no more delays.

However if there were no new cash-generating orders secured and the ferries were delayed by three months there would be an expected peak shortfall of £11.7m in May 2020.

This assumes a 14% productivity improvement in labour hours on 801 and 802.

“The circumstances described above, in relation to both contracts 801 and 802 and funding, represent material uncertainties that may cast significant doubt on the group’s ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

“However, the directors have taken assurance from recent meetings with both the Scottish Government and CBC [fellow investor Clyde Blowers Capital].

“Both parties have confirmed their commitment to working collaboratively to finding a solution to funding the vessels through to completion.”

Despite the headline loss figures, the company also said these could offset future tax bills.

“The company has unrecognised tax losses of £48,557,000 (2015: £2,544,000) that are available indefinitely to offset against future taxable profits,” it said.

At First Minister's Questions at Holyrood, Tory MSP Jamie Greene blamed the Scottish Government for the state of the ferry contract.

Nicola Sturgeon said the government had worked very hard to help the yard and keep it open. 

She said: "It is action by this Government in support of those who own, operate and run the shipyard that, I hope, will see it continue to have a very bright future."

Labour MSP Colin Smyth said: "No one will be surprised that much of Ferguson's losses are due to the CMAL Ferry deal.

"The failure of the Scottish Government to get a grip on this project and bring all parties together including Government owned CMAL means this deal is heading for the courts.

"The problems at Ferguson's also expose the inadequacies of the current Government Ferries Plan and the lack of a National Shipbuilding Plan from the Scottish Government, which would give Scotland’s shipyards a regular pattern of work and a secure future."

LibDem MSP Mike Rumbles added: "These ferries are already months behind schedule and now the firm in charge of construction is posting significant losses.

“This has been a poorly managed and opaquely funded deal from the beginning.

“The Scottish Government must ensure that the boats, which ministers backed with tens of millions of pounds worth of extra secretive loans, are delivered and high tech manufacturing jobs secured."

A CMAL spokesperson said: "Ferguson Marine Engineering Ltd is under contract to supply the design and build of the two dual fuel ferries. 

"It is an industry standard design and build contract with a fixed price and defined delivery dates. 

"FMEL entered into the contract with full and prior knowledge of the specification and terms of the contract. 

"CMAL fundamentally disagrees with any assertion that there have been significant design changes to the vessels. 

"Minor changes have followed the contractual process and costs for these have been agreed with FMEL. 

"These costs have been covered by a three per cent project contingency budget held by CMAL.”