Ferguson Marine: New delays of up to six months in Scots ferry 'farce'

Nationalised Ferguson Marine chief executive David Tydeman said new problems with Glen Sannox has added a further £20 million to its cost and admitted that completing it by the time of a "contract backstop" of no later than the end of December 2023 is a challenge.

He said he was optimistic that Glen Sannox "should be available to passengers in spring 2024".

The delayed second vessel, only known as Hull 802 which which was supposed to be online in the last reschedule in the autumn of 2024 having already been delayed to the end of March 2024, is now pushed back to November, 2024. The contract backstop was stated as being at the end of December 2024.

The Ferguson Marine chief said that since calling for £72m extra costs in September - a further £20m was needed to deal with further faults found with Glen Sannox for "specification compliance", replacement of equipment and pipework "some of which are proving very difficult to resolve"

There were further costs from changing steelwork, and from sub-contractors for their services for modifications and design changes.

Some issues had surfaced this month  with the Maritime and Coastguard Agency which is responsible for implementing safety policy and plans for days in dry-dock in September have had to move to December.

"We will update separately on any work scope and procurement challenges that may arise from this over the next month. It's clear and regrettable, that having 100% confidence in the delivery date for Glen Sannox will remain a challenge monthly as we progress through commissioning, snagging and handover trials during the rest of the year," said Mr Tydeman.

"Regrettably, re-work issues continue to arise and will probably not fully close out until handover. This has significantly increased the overall scope of work since we set out the forecasts last September."

A ferry user group official said: "Just when we thought we might finally see Glen Sannox in the autumn, we find that the goalposts have changed again. This fiasco has become nothing more than a farce and it is us islanders that are the ones that suffer every time.

READ MORE: Ferguson Marine admitted 'significant doubt' over ScotGov firm future

It is the latest twist in the ferry scandal which has seen claims that the disastrous £97m contract to build two lifeline vessels was rigged in favour of Ferguson Marine run by Jim McColl, who rescued the yard in the summer of 2014 in a move partly brokered by former First Minister Alex Salmond, who kept the entrepreneur abreast of businesses that needed saving.

The shipyard firm went into administration again in August, 2019 - just over a year after a second Scottish Government bailout loan amidst soaring costs and delays in the construction of the two ferries. Ferguson Marine was nationalised with Scottish Government-owned ferry procurer CMAL blaming each other for what went wrong.

The Ferguson Marine board admitted there was a "significant doubt" over its ability to continue as a going concern due to doubts over future funding in its last 2021/22 financial statement but later insisted it had a future.

After due diligence, ministers agreed to inject a further nearly £70m into the shipyard in this financial year.

Ministers sanctioned a cash injection of a further £61m in the last financial year alone as Ferguson Marine tries to deliver two long-delayed ferries.

Ministers were accused of presiding over an “outrageous mismanagement of public funds” after pressing ahead with the second ferry at the Ferguson shipyard, known only as Hull 802, despite learning it would be cheaper to scrap the vessel and tender for a new one.

It comes as the Scottish Government-owned ferry procurers and owners CMAL indicated two ferries being built in Turkey are being built to schedule and that after a public vote, they will be named as Isle of Islay and Loch Indaal following a public vote.

Analysis of the money trail based on the Scottish Government's own accounting and audits revealed that with an extra £72m sanctioned for this financial year, the cost to the taxpayer of supporting Ferguson Marine both before and after it forced its nationalisation has soared to more than £450m.

Wellbeing economy secretary Neil Gray confirmed that the government would proceed even though the project failed its value for money test.

He issued a rarely-used ministerial direction to overrule the value for money financial test saying completing the vessel at the nationalised yard was the fastest way of delivering more ferry capacity. That came after eight months of 'due diligence' over the extra funding requested by Ferguson Marine for this financial year.

Mr Tydeman in an update  said issues "some complex" continue to arise from design and build decisions made between 2015 and 2017 "exacerbated by changes in key contractors and designers in the recovery from administration in 2019 and other factors.."

But he said that subject to "key issues... and positive progress with final snagging and trials, Glen Sannox should be available for passengers in Spring '24."

He welcomed the further funds effectively sanctioned by Mr Gray, saying that it was a "welcome news for the future of the yard".

He has said in an update: "I have agreed with the sponsoring team within Scottish Government that I will update on the final out-turn costs for Glen Sannox and provide more details on the costs of re-work as we complete commissioning and handover trials during the rest of the year."

It has been confirmed that if Ferguson Marine needed more money going forward, that that situation would be reviewed, although Mr Gray has previously insisted there is "no blank cheque".

Both vessels were originally due to set sail in mid-2018 with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but they are well over five years late.

The two ferries for CalMac were ordered in 2015 when Ferguson Marine was owned by Mr McColl, a then pro-independence businessman who rescued the Inverclyde yard from administration a year earlier.