Scottish Government unveil £14m investment in Ferguson Marine

Details of the £175 million process for the small vessels were unveiled on Tuesday.

READ MORE: Clyde shipbuilding hope with SNP's Kate Forbes Ferguson plan

Unions and local politicians had previously urged the government to bypass the open competition to safeguard the future of the state owned yard.

While that plea was rebuffed, Ms Forbes did announce a £14.2m  investment in the Inverclyde-based firm “to improve productivity and build a sustainable future.”

The money will be used to “support the yard’s modernisation and improve productivity.”

That should mean Ferguson Marine is in a position to bid for the ferries.

Earlier this year, the firm's board warned that without upgrading their facilities, their ability to submit a successful bid to build the seven ferries was "uncertain".

The first stage of the tender process will look to see if the shipyards who express an interest in bidding for the contract meet the "financial and technical criteria to take on the project."

The government says that estimated costs for the first phase are around £175m for the seven new vessels, as well as port improvements and shore power upgrades.

The invitation to tender for this contract is expected to be issued around September 2024, with the final award announced in March 2025. 

The tendering for the new ferries has already been delayed by over two years. 

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

However, the plan was “reprofiled."

The government says the new ferries would be deployed on seven existing routes, and would allow two other vessels to be redeployed.

READ MORE: CalMac ferry fiasco ship set to be sidelined for the summer

The new ferries will be electric, unlike the much-delayed so-called ferry fiasco vessels, Glen Sannox and Glen Rosa, which are designed to run on both traditional marine gas oil and liquefied natural gas (LNG).

Those two are six years late and will cost around three times the original £97m price tag.

(Image: Colin Mearns)

Announcing the new long-term business plan for Ferguson Marine, Ms Forbes said up to £14.2 m will be invested over two years subject to the plan passing detailed legal analysis and independent financial and commercial assessments, which should be complete by the Autumn.

She said: “Now that Glen Sannox is approaching handover, our focus is on the next phase for Ferguson Marine Port Glasgow’s (FMPG) future. That requires change and investment to target new opportunities.

“The Board has developed a business plan that it believes has the potential to secure a competitive future. Subject to independent legal and commercial analysis, the Scottish Government will provide significant new funding to support the yard’s modernisation and improve productivity.”

On calls to directly award the small vessels to Ferguson Marine, Ms Forbes said: “Extensive analysis and legal advice confirm that a direct award of the small vessels phase one contract to FMPG introduces substantial risks and uncertainties for the shipyard and the communities which rely on the lifeline vessels, due to the strict conditions imposed by the UK Subsidy Control Act.

"Instead, we will do everything which is legally possible to support the yard and the workforce to secure a long-term future, which is why we have come to an agreement on initiatives and funding to improve productivity."

The Deputy First Minister added: “When the Scottish Government stepped in to save FMPG in 2019 we did so to preserve jobs and develop the next generation of shipbuilders on the River Clyde.

"That commitment remains unwavering. The company will of course be able to consider a bid, either individually or in partnership with other yards, but its long term future depends on winning work on a competitive basis.”

The government also announced that talks with BAE Systems about the yard securing further work on the Type 36 Frigate programme are at the "final stage."

READ MORE: CalMac ferry fiasco ship set to be sidelined for the summer

Louise Gilmour, GMB Scotland secretary, welcomed the investment but warned there would be "no shipyard without ships."

He added: “The workforce at Ferguson Marine is committed, skilled and entirely blameless for the errors made in recent years.

“Those skills will be crucial if the yard is to have a secure future and if Scotland is to have a successful industrial strategy.

“This yard is capable of becoming a cornerstone of that strategy and helping protect Scotland’s shipbuilding heritage for new generations of workers and apprentices.

“Their jobs must be secured while the yard becomes commercially competitive to ensure their skills are available when ships are again built there.

“This is an opportunity that must not be squandered and every pound of investment must be spent to ensure the yard is swiftly in a position to win future contracts and create skilled, well-paid jobs in Inverclyde for decades to come.”

Martin McCluskey, the Labour MP for Inverclyde and Renfrewshire West, said it was “very disappointing that the Scottish Government have decided against a direct award to Fergusons”.

He added: “People will be left wondering why Scottish Government ministers aren’t willing to award the contract to a Scottish Government-owned yard in order to protect jobs.

“While the investment in the yard is welcome, what is needed is a sustainable order book that can secure shipbuilding on the lower Clyde, and the jobs and skills that come with it. That is what the workforce at the yard deserves.

“It is important that the yard tenders for this work and the Cabinet Secretary gives any submission from Ferguson Marine the consideration it deserves.”

Scottish Conservative shadow transport minister Graham Simpson said: “It has taken far too long to reach this point to the dismay of islanders.

“As the procurement for the small ferries replacement programme finally gets underway, it is vital the SNP ensures it delivers value for money for taxpayer and puts the needs of island communities first.

“Given the secrecy that has been at the heart of the SNP’s ferry scandal, the process of awarding this contract must be fair and transparent throughout.

“Once it is awarded, it must deliver ferries that are on time and on budget and are lifeline services islanders will be confident are reliable.”

Scottish Liberal Democrat economy spokesperson Willie Rennie said: “We’re all praying that the SNP Government don’t repeat the horrific mistakes of the last two ferries built at Ferguson Shipyard although the loss of the expertise provided by David Tydeman is a great concern.

“The decision to opt for a competitive tender process is risky as the yard needs a regular drumbeat of orders and work to maintain the skilled workers essential for the construction of the ferries.”

Alba Party General Secretary Chris McEleny said the decision to not directly award the contract to Ferguson Marine was "nothing short of a betrayal of the people of Inverclyde and the workforce at Ferguson’s in Port Glasgow."

"I have been campaigning for the Scottish Government to directly award this work to Ferguson’s, warning them that if they did not then there would be no steel left to cut at the yard, no work left and no orders in the pipeline.

"This means one thing and one thing only, the closure of the yard."

Meanwhile, in other shipbuilding news, Mull-based Inverlussa Marine Services has appointed Macduff Shipyards to design and build a new hybrid workboat to support the Scottish salmon sector.

The contract is expected to create an additional six jobs within the company, bringing the total number of employees to 140. 

Construction work on the vessel is expected to commence shortly, with plans for it to be operational by the third quarter of 2025, supporting salmon farms off the west coast, as well as in Shetland and Orkney.