The Scottish Government-owned Ferguson Marine shipyard has advanced to the second stage of the process to replace small ferries, increasing hopes for its future.

The Port Glasgow-based yard has been selected to advance to the invite to tender stage of the small vessel replacement programme along with Cammell Laird in Liverpool, Chilean firm Asenav SA, Turkish yard Cemre Marin Edustri AS, the Polish Remontowa Shipbuilding SA, and the multinational Damen Offshore and Specialised Vessels.

The £175 million programme will build seven smaller electric vessels to the country’s less-populated islands.

Tenders are expected by January, with the contract award due in March.

Connectivity minister Jim Fairlie said the Government was “absolutely committed” to improving the country’s ageing ferry fleet, adding he is “very pleased” the procurement process has moved to the second stage.

“Our intention is that these ferries would be deployed on seven existing routes, but would also bring benefits to two other routes from the redeployment of existing vessels,” he added.

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“The new vessels will also be electric, helping us to deliver a significant improvement in emissions and local air quality and taking us towards a lower carbon ferry network.

“This procurement is a vital step forward in our plans to improve our ferry services and I look forward to following its progress closely over the coming months.”

Kevin Hobbs, chief executive of ferry procurement body Caledonian Maritime Assets Limited, said: “We received interest from many shipyards across the world and carried out a robust assessment against set criteria, including their suitability to take on this project.

“Six shipyards scored the highest across the criteria, and have now been issued an invitation to tender for the contract.

“We look forward to reviewing the tender documents in the new year, and delivering the electric vessels which will continue our rejuvenation of the fleet and shore infrastructure for island communities.”

The contract is to build seven small ferries for CalMac, which will serve Bute, Mull, Iona, Gigha, Portavadie and Raasay, as part of the Small Vessels Replacement Programme.

Ferguson Marine has been at the centre of an ongoing political storm since its nationalisation in 2019, with the troubled delivery of two ferries for the west coast network being years late and millions over budget.

The ships, Glen Sannox and Glen Rosa were already under construction and facing delays and budget issues when the company went into administration and it was nationalised when no suitable private buyer could be found.

After the ferries are delivered, with one expected imminently and another due in September of next year, ministers have repeatedly suggested they will seek to put the yard on a stable footing with orders coming in before returning it to the private sector.

Winning the contract for the Small Vessels Replacement Programme is seen as a crucial step in this progress, and the 50m ferries are similar to ones previously delivered on-time and on-budget by the yard in Inverclyde.

The GMB Union had previously called for Ferguson Marine to be awarded the contract directly, with no tendering process.

Senior organiser in engineering and manufacturing Gary Cook said: "The need for a pipeline of work to support this yard could not be clearer or more urgent.

“The small ferries’ contract must be the start of that pipeline and is exactly the kind of work this yard successfully completed for many years.

“These contracts would become a springboard back to profitability and help the workforce repay taxpayers for the faith and investment already placed in the yard.

“The workers are committed, skilled and completely blameless for the errors made in recent years and must be given the chance to show that."

The Scottish Government has already committed to more than £14m in modernisation works at the yard, which currently employs around 300 people including 50 apprentices.

However, ministers rejected calls to make a direct award to Ferguson Marine on the basis it could be subject to legal challenge, creating delays in delivery and pushing costs up.

The shipyard has existed in Port Glasgow since 1903 when it was set up by four Ferguson brothers, Peter, Daniel, Louis and Robert.

It was previously nationalised by the UK Government in 1977, before being returned to the private sector in a merger with the Ayrshire firm Ailsa Shipbuilding in 1980.

The two were separated again six years later, with the last ship built by Ailsa in Troon the MV Lochnevis.

That ferry is expected to be replaced in phase two of the Small Vessels Replacement Programme.