ScotGov to 'leave no stone unturned' to save Ferguson Marine

The public spending regulator Audit Scotland has highlighted a "significant degree of uncertainty" over the future of Inverclyde yard without financial support to secure its future.

Questions have been raised about whether the Scottish Government will directly award to the yard the new wave of 'loch class' vessels as part of the small vessel replacement program to provide security to hundreds of jobs.

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.

READ MORE: Auditors register 'significant uncertainty' on Ferguson Marine future

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

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.

And 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.

But Ms McAllan has now made the biggest commitment yet made in the wake of the uncertainty over the yard over its future - a matter of weeks after Ferguson Marine's chief executive was sacked in the wake of continuing concern over the escalating costs of Scotland's ferry fiasco.

Andrew Miller, the chairman of Ferguson Marine said it needed "strong leadership" to ensure its long-term future.

Costs continue to soar over new ferries Glen Sannox and Glen Rosa being built at the Inverclyde yard, which 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.

When quizzed by MSPs over the aftermath of the symbolic launch of Glen Rosa, she said: "We will leave no stone unturned when it comes to securing a sustainable future for Ferguson Marine."

She has agreed to attend a cross-party summit where crucial talks will be held on how to deliver new contracts for the troubled shipyard.

Announcing the plans at the STUC congress in Dundee, the GMB Scotland union said it will facilitate the discussions next month between all those invested in the shipyard’s future.

Ms McAllan, who attended the launch of the Glen Rosa has promised to stand with the shipyard “long into the future”.

READ MORE: New fears for future of Ferguson Marine after ScotGov announcement

She told MSPs: "When we made our decision to take Ferguson Marine into public ownership, we were clear that we've done so to protect jobs and vital skills and my comments [at the Glen Rosa launch] reaffirmed our continuing commitment to shipbuilding and Scotland."

She said that an updated business plan over future investment in the yard has been received by the Scottish Government and that it was being considered "speedily".

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.

Mr Tydeman has been replaced by fourth generation shipbuilder John Petticrew as interim chief executive.

According to Ferguson Marine Mr Petticrew has a "long career in shipbuilding and infrastructure construction with over 40 years of experience, spanning three different continents".

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.