Ministers 'dithering' over future of ferries and shipyard firm

Concerns have arisen over a 'dithering' over whether ministers will continue to financially support the future of the nationalised shipyard firm Ferguson Marine and the procurement of seven vital lifeline ferries for Scotland's islanders.

The process for tendering of the ferries has already been delayed by over two years while union leaders have been appealing for the contract to go directly to state-owned Ferguson Marine, to secure its future.

Ministers have been accused of 'sleepwalking' the nationalised firm at the centre of Scotland's shipbuilding scandal into oblivion by failing to support its bid for the ferry work.

As of May 30, it was confirmed that no Scottish Government decision had been made whether ministers would invest more money into the future of the yard after the board prepared a new business plan.

Despite the belief in past weeks that a decision was required "imminently" as of May 30, no definitive timetable was available to remove the uncertainty – with just 10 days to go before the Scottish Parliament goes into recess for two months.

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The Scottish Government has been urged to act after decisions on key work the yard is hoping to rely on has been plunged into uncertainty.

The board of state-owned shipyard firm Ferguson Marine has admitted a lack of commitment over future Scottish Government investment in upgrading facilities at the last surviving commercial shipbuilder on the Clyde, means the ability to pursue a vital Scottish Government contract to build seven small ferries "remains uncertain".

Scottish Conservatives shadow transport minister Graham Simpson said: "These decisions should have been made some time ago. Kate Forbes was left in no doubt at the recent summit in Greenock [on May 15] that she had to decide on further investment for Fergusons within days but she did not.

"Now we are in a General Election period the government can’t announce anything.

"As soon as the election has been held then we need to know what is happening with the small ferries programme and what is happening with the yard."

In February 2021, state-owned ferry owners and buyers, Caledonian Maritime Assets Limited (CMAL) said that the procurement for the replacement vessels was "on course" to begin within the next 12 months.

In August, last year CMAL was finally expecting the first questionnaire stage of the procurement process to begin in November. It has yet to start.

(Image: Newsquest)
Public events surrounding the procurement of the new ferries were told that the first vessel is provisionally expected to be delivered between July and August of 2026 with the last due in the last three months of 2028.

A Scottish Government infrastructure investment plan update in September 2021 stated that all seven vessels would serve island communities "within the next five years".

Finance secretary Shona Robison previously advised that the small lifeline ferries replacement plan had been "reprofiled" as had harbour improvements at Ardrossan and Gourock.

It meant that an initial £41m spending plan on the ferries has been put back to this financial year – 2024/25.

Campaigners have been fighting for nationalised Ferguson Marine to get a direct award of the ferry contract from the Scottish Government which is already looking to do the same for ferry operator CalMac as it is the 'preferred option' for the next Clyde & Hebrides Ferry Services (CHFS) contract.

Loss-making Ferguson Marine (Port Glasgow) had pinned hopes on heavy involvement in the contract from the Scottish Government's Transport Scotland agency for the replacement of up to seven 50m ageing 'loch class' ferries vessels serving the Clyde & Hebrides Ferry Services (CHFS).

The ferries are due to be electric motor-powered modern versions of the three 42m hybrid vessels Ferguson Marine built successfully, on-time and on-budget before nationalisation, between 2012 and 2015.

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One ferry user group official said that he hoped that the final outcome would be worth waiting for.

"The dithering is worrying, because the Scottish Government has already rejected one business case from Ferguson Marine, and it looks to me like the small vessels replacement programme, is also being pushed back and pushed back as we try to decide which direction to go in.

"We are nearly a year on from the public engagement events and yet we still do not have a direction of travel and those ferries are absolutely essential."

Mr Simpson, who has been quizzing Scottish Government officials about progress at the Scottish Parliament's public audit committee had asked then wellbeing economy secretary Neil Gray what subsidy control rules had prevented ministers from passing the business case last year.

He replied: "The independent due diligence on Ferguson Marine’s initial capital investment request concluded that the initial business case would not meet the Commercial Market Operator test, which is a key legal requirement if we are to demonstrate compliance with the subsidy control regime."

He has since been told by Gregor Irwin the Scottish Government's director-general for economy after being asked whether this was still an issue: "The more recent business plan was submitted on 5 April. Now that we are in receipt of it, we are pursuing the due diligence and providing advice to our ministers in the right way.

"We are making sure that we get it right and that it is not susceptible to legal challenge, because that would not be in the interests of the yard or its workers. We hope that that will reach a conclusion soon – we can absolutely say that – and we are doing everything that we can to do that as quickly as possible.

"The same legal principles apply but, each time, the actual proposal that is made must be tested. The test is whether a commercial market operator would take forward the business case and investment proposal, so it is very specific to the actual proposition. Each time that we get a business plan and investment proposal, it needs to go through a due diligence process so that we can be assured that it meets subsidy control rules.

"The legal advice is clear, to be honest – we understand what exactly the position is on the subsidy control framework – but we require commercial due diligence to be undertaken, because each specific business plan and investment proposal needs to be subjected to the commercial market operator test."

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Ferguson Marine has been dogged with issues with the delivery of lifeline ferries Glen Sannox and Glen Rosa which were due online in the first half of 2018 when Ferguson Marine was under the control of tycoon Jim McColl. With both now due to serve Arran, they are now over six years late and the costs of delivery could be more than quadruple the original £97m cost.

German ship design consultants handed £360,000 three years ago to help with the concept of the seven ferries and try to provide better and greener lifeline services for Scotland's islands.

Flensburg-based Navalue, which was formed five years ago, was brought in to help provide planning direction for the project to replace some of the country's oldest vessels on the Clyde and Hebrides Ferry Services network.

The new loch class vessels were to replace 38-year-old MV Loch Striven on the Oban to Lismore route, 38-year-old MV Loch Riddon on Largs to Cumbrae, 37-year-old MV Loch Ranza on Tayinloan to Gigha, 33-year-old MV Loch Dunvegan on Colintraive to Rhubodach, 33-year-old MV Loch Fyne on Mallaig to Armadale, 32-year-old MV Loch Tarbert on Tobermory to Kilchoan and 38-year-old MV Loch Linnhe, the relief vessel.