New fears for future of Ferguson Marine after ScotGov announcement

But ministers failed to commit to the issue raising continuing fears that Ferguson Marine will have to compete with other companies for the right to deliver them.

Union leaders had feared that when a decision is made by ministers, it will announce the contract must go to a competitive tender - ruling out a direct award to the yard to safeguard hundreds of jobs.

And they had told ministers before the latest announcement that the direct award was needed .

There had been hopes that ministers would make clear what the future was of the contract in parliament on Wednesday

Wellbeing economy secretary Màiri McAllan  avoided mention of the vital contract in parliament before giving little in the way immediate hope following questioning.

She said: "From my part, direct award is only possible in very strictly limited circumstances under procurement rules.

"Breaching these rules is not an option in and of itself but equally it could lead to legal challenges to cost, and to further delay.  So we will consider future contracts for vessels from public agencies on a case by case basis and whether any might be open to direct award in these strictly limited circumstances."

The cabinet secretary could not give any assurances after later receiving a direct appeal for the award from SNP Greenock and Inverclyde MSP Stuart McMillan.

She said: "Ferguson Marine is absolutely right to be turning its mind to winning its next contracts. I'm very happy to say that we will do all we can as shareholder to ensure that the business has a sustainable order book and a future and in the respect of small vessel replacement program, we are currently considering the business case and an update on the procurement strategy will be provided in due course once a decision on investment has been made.

"I understand the potential opportunity that the small vessel replacement program offers to Ferguson Marine.  But I have to restate once again, that direct awards are only legal in strictly limited circumstances."

She earlier said: "I recognise of course that as the existing contracts near completion, these are unsettling times for the workforce and I have been impressed by the passion and commitment shown by the trade unions in making the case for future investment.

"I was pleased to have the chance to hear directly from union representatives during a meeting in parliament last week. Their views are vitally important to me, and I took the opportunity to listen and to give them an assurance that Ministers will leave no stone unturned when it comes to securing a future for the yard and shipbuilding on the Clyde."

Ms McAllan said that she was "determined to do all I can to support the shipyard to secure a route to a sustainable future".

She said: "I have already met with the trade unions and I understand both their frustrations about the mistakes of the past and their determination to find a brighter future for their current members, and future generations of workers in Inverclyde. I don’t underestimate the challenges involved but the yard is incredibly significant to the local, regional and national economy of Scotland and we are committed to doing all we can to ensure it remains so."

There had been concerns that the Scottish Government are treating the loss-making yard very differently to its sister state-owned ferry operator CalMac as it has already decided that the preferred option for the next contract over the future of lifeline island ferry services was a direct award - closing the door on bringing in private operators.

And the Scottish Government had ruled out, for the time being, ploughing a further £25m requested for the modernisation of their shipyard firm as part of a new business plan to secure a sustainable future beyond just the delivery of the two wildly-delayed and over-budget lifeline ferries vital for its hopes of getting the contract for the Small Vessel Replacement Programme.

Ms McAllan said that they had asked the board to revisit the plan and said she hoped this would be successful "and that the board will be able to provide a robust case for investment that is deliverable, makes economic sense and of course, meets our legal requirements on subsidy control".

She said the Scottish Government had provided funding to enable the yard to draw upon external advisors to support the process and a new business plan was expected by the end of the month.

The Alba Party's general secretary Chris McEleny was disappointed that there was no reference to the future ferry contract and said that "as the Scottish Government dither, Ferguson's will close."

The former Inverclyde Council SNP group leader said it will only remain open if the Scottish Government directly awards the contract to Ferguson Marine.

"If we don't direct award the yard will be shut," he said. "It is time for the government to come off the fence. What are we waiting on."

Plans to begin procurement of a new wave of initially seven vital lifeline ferries for Scotland's islanders have already been delayed by nearly two years.

Unions have said that decisions over the potential to directly award the ferries contract to Ferguson Marine need to be taken soon as workers are already being seconded to other yards, which risks it losing the necessary skills and experience.

There are concerns that without a direct award, the yard would fail in a competitive tender for the work, that is seen as crucial for its future.

Ferguson Marine had failed to get onto the shortlist of potential contractors after failing at the first Pre Qualification Questionnaire hurdle for the £105m contract for the first of two two-ferry contracts that were given to the Cemre Marin Endustri shipyard in Turkey.

And it subsequently failed to even bid for the work on building the £115m second batch before it was again awarded to the same Turkish shipyard.

Ferguson Marine conducted a detailed analysis of bidding for the contract but concluded that, based on the associated documents published, the probability of winning the contract was "sufficiently low to recommend declining to bid".

Papers associated with the decision showed that it was believed that the qualification conditions in the tender documents contained criteria Ferguson Marine could not meet.

Key factors included that the two vessels in the series had already been awarded to Cemre Marin Endustri.

The board of the loss-making yard admitted in November that a lack of financial support from ministers had cast a "significant doubt" on the firm's ability to continue operations.

Ferguson Marine (Port Glasgow) made a net loss of £1.3m in 2022/23 and there have been concerns about the risks to the business while pointing to a failure to get a committed investment of £25m to support future work at the Inverclyde after the delivery of ferries Glen Sannox and Glen Rosa.

The two new ferries being built at the nationalised Ferguson Marine shipyard were due online in the first half of 2018, with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but are at least six years late, with costs expected to be quadruple the original £97m contract. It has been confirmed that both are now to serve Arran.

Glen Sannox, was launched by Nicola Sturgeon nearly seven years ago and is not expected to be ready till July at the earliest.

Glen Rosa was meant to be delivered to CalMac in August 2018, but that is currently scheduled for May 2025.

But the dates of arrival have been constantly in a state of flux as their construction has been plagued by design challenges, cost overruns and delays.

In the midst of the delays and soaring costs, Ferguson Marine under the control of tycoon Jim McColl fell into administration and was nationalised at the end of 2019 with CMAL and the yard's management blaming each other.