Ministers who sanctioned pumping millions into the shipyard at the centre of Scotland's ferry scandal said the construction of two lifeline ferries will continue despite concerns over a new wave of extra costs and delays of around six months.
Nationalised Ferguson Marine has confirmed that further issues with vessels being built for lifeline communities will mean a further £20m in costs on top of an already escalating price tag and a delay of up to six months in the delivery of the first ship.
The latest issues come a matter of weeks after wellbeing economy secretary Neil Gray agreed to inject nearly £70m further into the shipyard after a budget request from the yard in September in the wake of eight months of due diligence.
There has been criticism that news of the new problems slipped out as MSPs were about to enter summer recess, with no opportunity for parliamentary questioning.
Ministers sanctioned a cash injection of a further £61m in the last financial year alone as Ferguson Marine tries to deliver two long-delayed ferries.
And it has been confirmed that the latest issues will not stop ministers proceeding with the completion of the two vessels. It is not yet known whether the extra £20m costs will be subject to a new due diligence test by the Scottish Government.
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Ministers were accused of presiding over an “outrageous mismanagement of public funds” after pressing ahead with the second ferry at the Ferguson shipyard, known only as Hull 802, despite learning it would be cheaper to scrap the vessel and tender for a new one.
Analysis of the money trail based on the Scottish Government's own accounting and audits revealed that with an extra £72m sanctioned for this financial year, the cost to the taxpayer of supporting Ferguson Marine both before and after it forced its nationalisation has soared to more than £450m.
It has emerged that the much delayed Glen Sannox whose latest reschedule was for a handover in the autumn of 2023 is now set to be available for passengers in the spring of next year.
Nationalised Ferguson Marine chief executive David Tydeman said new problems with Glen Sannox has added a further £20 million to its cost and admitted that completing it by the time of a "contract backstop" of no later than the end of December 2023 is a challenge.
He said that Glen Sannox "should be available to passengers in spring 2024".
The delayed second vessel, only known as Hull 802 which was supposed to be online in the last reschedule in the autumn of 2024 having already been delayed to the end of March 2024, is now pushed back to November, 2024. The contract backstop was stated as being at the end of December 2024.
The Ferguson Marine chief said that since calling for £72m extra costs in September - a further £20m was needed to deal with further faults found with Glen Sannox for "specification compliance", replacement of equipment and pipework "some of which are proving very difficult to resolve"
There were further costs from changing steelwork, and from sub-contractors for their services for modifications and design changes.
Some issues had surfaced this month with the Maritime and Coastguard Agency which is responsible for implementing safety policy and plans for days in dry-dock in September with Glen Sannox have had to move to December after it was due to set sail.
Wellbeing economy secretary Neil Gray said in mid-May that the government would proceed with the ferries even though the continuation of Hull 802 failed its value for money test.
He issued a rarely-used ministerial direction to overrule the value for money financial test saying completing the vessel at the nationalised yard was the fastest way of delivering more ferry capacity. That came after the due diligence scrutiny over the extra funding requested by Ferguson Marine for this financial year.
He said in a briefing to the convenors of the public audit and transport committees Richard Leonard and Edward Mountain that he was "extremely disappointed by the projected increase in costs and share the very real concerns that our island communities, in particular, will feel as a result of his update".
He said deciding to carry on with the vessels was "based on the interests of our island communities and the wider social and economic benefits to the area around Port Glasgow".
Mr Gray added: "I have made it repeatedly clear that I expect the management of Ferguson Marine do everything possible to minimise costs and ensure that these vessels enter service as soon as possible.
"I do, of course, accept that there are inflationary pressures in the wider economy and inherent risks around the delivery of first-in-class vessels, particularly when [Ferguson Marine] are wrestling with the consequences of design decisions taken some time ago under previous ownership. However, I expect the management of the yard to bear down on these costs and to continue working with my officials to scrutinise expenditure and report performance in an open and transparent way."
Mr Mountain who headed the transport committee's inquiry into the future of ferries said: "This is an absolute disgrace and the new transport minister should have ensured that Parliament knew about this before it went on to summer recess.
"It is the same old games being played by this government on the ferries, and makes a mockery of their commitment to serve islanders. "
The Scottish Conservative Highlands and Islands MSP added: "If Mr Gray is disappointed, the islanders will be furious. The government's handling of this contract is a joke."
It is the latest twist in the ferry scandal which has seen claims that the disastrous £97m contract to build two lifeline vessels was rigged in favour of Ferguson Marine run by Jim McColl, who rescued the yard in the summer of 2014 in a move partly brokered by former First Minister Alex Salmond, who kept the entrepreneur abreast of businesses that needed saving.
The shipyard firm went into administration again in August, 2019 - just over a year after a second Scottish Government bailout loan amidst soaring costs and delays in the construction of the two ferries. Ferguson Marine was nationalised with Scottish Government-owned ferry procurer CMAL blaming each other for what went wrong.
The Ferguson Marine board admitted there was a "significant doubt" over its ability to continue as a going concern due to doubts over future funding in its last 2021/22 financial statement but later insisted it had a future.
A ferry user group official said: "Just when we thought we might finally see Glen Sannox in the autumn, we find that the goalposts have changed again. This fiasco has become nothing more than a farce and it is us islanders that are the ones that suffer every time."
Mr Tydeman in an update said issues "some complex" continue to arise from design and build decisions made between 2015 and 2017 "exacerbated by changes in key contractors and designers in the recovery from administration in 2019 and other factors.."
But he said that subject to "key issues... and positive progress with final snagging and trials, Glen Sannox should be available for passengers in Spring '24."
He welcomed the further funds effectively sanctioned by Mr Gray, saying that it was "welcome news for the future of the yard".
He has said in an update: "I have agreed with the sponsoring team within Scottish Government that I will update on the final out-turn costs for Glen Sannox and provide more details on the costs of re-work as we complete commissioning and handover trials during the rest of the year."
It has been confirmed by ministers that if Ferguson Marine needed more money going forward, that situation would be reviewed, although Mr Gray has previously insisted there is "no blank cheque".
Both vessels were originally due to set sail in mid-2018 with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but they are well over five years late.
The two ferries for CalMac were ordered in 2015 when Ferguson Marine was owned by Mr McColl, a then pro-independence businessman who rescued the Inverclyde yard from administration a year earlier.
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