Jim McColl: ScotGov-controlled CMAL 'got away with it' in Ferguson Marine ferry fiasco

The tycoon, who had been taken the need for an independent assessor to the First Minister, accepted that Ferguson Marine shared "some responsibility" for the fiasco but "compared to the big issue here, it's very very small."

Mr McColl, one of Scotland’s wealthiest men, spoke out in a parliametnary public audit committee inquiry into the failure to deliver two island ferries MV Glen Sannox and Hull 802, which were due online in the first half of 2018, and are at least five years late, with costs soaring from £97m to £250m.

The collapse of the Mr McColl-led Ferguson Marine, which runs the last remaining shipyard on the lower Clyde, in August 2019, came amid soaring costs and delays and resulted in a Scottish Government-pursued nationalisation.

That came five years after the tycoon first rescued the yard when it went bust.

Mr McColl, once a supporter of the Scottish Government’s policy of independence for Scotland, but who now says he now has no political leanings, said the move brokered by former first minister Alex Salmond and then finance secretary John Swinney.

Mr McColl, who continues to call for independent judge-led inquiry into the fiasco blamed the rising costs on repeated design changes by CMAL, the owners and procurers of Scotland’s ferry fleet, in building the vessels for state-controlled ferry operator CalMac, which is also publicly owned.

He repeated claims that CMAL and the Scottish Government had always known that Ferguson Marine were unable to provide mandatory builder's refund guarantees before the Inverclyde shipyard firm he ran were named as preferred bidder.

Audit Scotland has previously criticised the government for failing to provide an adequate paper trail around the decision to award the contract without it.

And he said that if he had ever known that CMAL objected to Ferguson Marine's moves to avoid the guarantees, then he would never have bid for the ships.

He said: "There are four main factors which have caused the massive cost overruns and extensive delays. First, the wrong type of vessels were selected. Second, [there was] insufficient development of the specification prior to the placing of the order.

"The third factor is shutting down all opportunities during this build process for dispute resolution, and fourth, the nationalisation and the steps that have been taken since then have been catastrophic."

Mr McColl's main criticism was with CMAL who he said had "got off" with any criticism over the issues which he said was caused by their changes.

"It was always going to cost a lot more. What we were pushing for early on was, let's have mediation to agree who's at fault here. I wasn't expecting Ferguson to get off with it. I was expecting them to be responsible for some, but for sure CMAL shouldn't have got off with it, but they have.

"There was a lot of urgency on trying to get a dispute resolution and that needed independent expert determination and that was pushed by Transport Scotland, but was refused by the chairman of CMAL.

"My evidence is that at every turn there would be the natural thing to have a dispute resolution session, it was blocked by CMAL.

"My question is if they were so sure of that position, why would they be afraid to enter in to an independent expert. They've not wanted an expert to get near this."

They Clyde Blowers' executive said that then transport minister Derek Mackay had asked officials to leave the room when he was told that he couldn't force CMAL into a dispute resolution because they had "sent a legal letter to government ministers, threatening that if they interfered with them as an independent board, or if they continued to interfere with them as an independent board, they would resign, en masse".

He said there was nobody to corroborate this.

The former Ferguson executive said even Humza Yousaf, when he was transport minister, put out an email suggesting all interested parties get together for a peer review.

" We accepted that. CMAL didn't," he said. "Transport Scotland proposed an expert determination process, again it was blocked by CMAL.

"Every time somebody was brought up to bring in experts to look at this, it was blocked by CMAL. Why they're allowed to do that, i don't know."

Mr McColl believed that part of the reason for the Scottish Government's push to nationalise as the only objective for the yard as it financially imploded was to "attempt to protect CMAL from any downside in all this".

He was asked by the committee convenor Richard Leonard why he said we now know why the SNP government did not take a stronger stance with CMAL.

Mr McColl said because it looked as if CMAL had been under political pressure to make Ferguson Marine the preferred bidder on August, 2015 and then to be sign off on the contract finally the following October, despite the lack of the guarantees.

He said it was  “absolutely nonsense” to suggest that anything negative would have happened to the yard had the contract for the ferries not been awarded.

"What came out of the Audit Scotland report was the evidence about the chairman of CMAL's quite strong opposition to Ferguson's getting the job. We didn't know at the time that there was strong opposition from CMAL.

"We wouldn't have taken that job if we'd known how strong the opposition was to us getting it, and it looked at if they had been pushed into accepting Ferguson. That's what it looked like to me."

Mr McColl also slammed Tim Hair, who was appointed as £2800-a-day turnaround director at the yard after it was taken over by the Scottish Government in late 2019.

He told MSPs that most of the senior management team and key managers at the yard were “immediately dismissed” following the appointment of  Mr Hair and all made to sign non-disclosure agreements (NDAs) meaning that they are unable to speak out.

He told the committee that there was no planning meeting held for six months after Hair was appointed.

He continued: “What Tim Hair did was he wiped out all the systems we had because there was no big enterprise planning system, integrated enterprise planning."

Mr McColl was asked by Mr Leonard if he shared any responsibility for the catastrophe.

He replied: "I don't believe so, because we pushed hard. The way to do this was we tried to work early on with the CMAL people on developing the spec, although it was underdeveloped when we got it. We tried as hard as we could.

"We tried very hard to get dispute resolution. We couldn't have done any more on dispute resolution. And on nationalisation, we did offer an alternative to nationalisation and I don't know what else we could have done. These two ferries inherently cost more than the first bid that was put in.

"If we do share some responsibility it is perhaps in not realising the extent to which this may overrun and, and the extent of the shortcomings in the spec.

"However, [two reports] said things were emerging that you couldn't have foreseen. So we had to deal with them as they arose, and I'm sure we have some responsibility, absolutely. But compared to the big issue here, it's it's very very small."

The Scottish Government has said it believes it was acting in the public interest in taking complete control of FMEL by December, as it saved the yard from closure, rescued more than 300 jobs, and ensured that the two vessels under construction will be completed.

A spokesperson for CMAL said: “The terms of dispute resolution put forward by FMEL were not covered in the contract. We look forward to addressing this, plus several other misleading statements, in front of the committee on June 30.”