Our shipyard wasn’t nationalised and we became a success

The eco-friendly boats, the first of their kind in North America, were to run on both traditional marine diesel and liquefied natural gas (LNG), the cleanest fossil fuel.

The order proved highly complex and overran by several years and $100m, with STQ refusing to pay over the original price.

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Meanwhile in Scotland, Jim McColl’s Clyde Blowers empire bought Ferguson Marine in Port Glasgow in 2014, then landed a £97m contract for two dual-fuel ferries from CMAL, the state-owned firm behind CalMac.

The order proved highly complex and overran by several years and 100 per cent, with CMAL refusing to budge on price.

SNP ministers loaned Ferguson’s £45m to stay afloat, but the blame game and the cash flow problems continued.

Last month the yard was put into administration and now faces nationalisation.

In Canada, the Quebec government helped resolve the dispute with STQ, and Davie has gone from strength to strength under the same owner.

“It’s an almost identical story,” Mr Vicefield, chair and CEO of Inocea, told the Herald.

“We had two prototype LNG ferries of a similar design and propulsion systems to the ones at Ferguson’s - and we had a government buyer, the government of Quebec. 

“What happened with us is what happened with Ferguson’s. We realised the ships were going to be twice as much as first thought. We sat there for a long time in a stalemate with a part-built ship and a client saying, ‘fixed price, fixed price, fixed price’.

“The difference in our situation was that the government of Quebec saw sense and took a leadership role. They appointed an independent expert who mediated and basically said, ‘Yes, Davie are right. The ships would cost that much to build.’

“The government got a fair price and so did we, and everyone won because those ships were built no problems. 

“In Canada, the blame was put onto the STQ. Why wouldn’t the Scottish Government at least appoint an independent expert to look at where the blame really lies?”

He said he and Mr Davies had been “shocked” when they first saw the Ferguson contract price and knew from the outset it would cost more. After following its progress, they recently contracted Mr McColl.

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“I think he nearly fell off his chair when he heard the similarities between our situations.”

Mr Davies, CEO at Davie, said a fixed price for the CalMac ferries was “a complete fiction”, given the rules governing such boats in the UK didn’t exist when the contract began. 

“It’s not like a Ford Fiesta and you turn up and say I want the blue one,” he said. “You’re talking about a technology which is very new. When we started you couldn’t possibly price it because you couldn’t know it needed double pipework for all the fuel lines, for example. All these changes add a huge amount of cost. It’s aspirational.”

Mr Vicefield said CMAL’s attitude showed a basic misunderstanding of shipbuilding.

“To be honest, no shipbuilding project is really fixed price because you will always have changes as you go through. 

“It’s always easy to put the blame on the shipyard, but in fact the buyer of a ship is equally as important in ensuring a successful outcome for a shipbuilding programme.”

The pair are critical of CMAL (“inexperienced” and “incompetent”) and the Government. 

“If they had built the ships in the biggest, most experienced, most established shipyard in the world, they would still have encountered these problems,” said Mr Vicefield, adding he was impressed by the technical abilities at Ferguson’s.

“From our perspective, the nationalisation of a shipyard is a terrible idea and that’s obviously the government’s fault. But if you go back to looking at who’s actually to blame for this situation, you really have to look at CMAL.”

Mr Davies said the government should have taken a much longer view of the situation.

“When you restart a yard like Ferguson, any yard, it takes a while for the momentum and the throughput to reach stability.

“If they brought McColl back in to run the operation, that could make it work.”

Mr Vicefield added: “The best the Scottish Government could do now is bring in some form of independent expert to assess the situation." 

As for the future, he is pessimistic unless the government changes course.

"If any commercial buyer comes in, they’re going to want exactly the same thing as McColl would want, which is for the client to pay its fair way. We would be so proud if Ferguson could stand on its own two feet and be a commercial success. It’s just insanity to do what they’re doing.”