The ferries are now three years overdue, less than half built and are predicted to cost £110 million more than originally estimated. Hair says that the ships are “significantly less than half built” and that 95% of the ships design has not been agreed with CMAL more than four years after the ships were ordered. He said that more naval architects and engineers have been taken on to deal with this. The shipyards executive said that the planning process for changes to the design under the yards prior to nationalisation was “either absent or badly flawed”:
The number of £110m [the extra money needed to finish the project] has been arrived at from a very detailed examination of the two vessels and an understanding of the work that needs to be done in order to bring them up to a viable standard.It is a very significant number but it is a number that has been based on as rigorous an assessment as we’ve been able to carry out. It’s one where I am confident we can deliver the two vessels for that amount.
Committee member and Tory MSP Peter Chapman said people would find the situation “absolutely incredible”.
How the heck do you get to £110m, which is more than what the original cost was to start from scratch with a pile of steel and nothing?
A summary judgment is granted in favour of HCC International insurance aganst CMAL to claim £5 million owed as a result of the way ministers bought the shipyard when it was in administration. The Scottish government, which owns CMAL, said it was aware. Deputy High Court Judge Simon Gleeson:
It is easy to see why this decision seems to have caused so much anger and irritation amongst the Scottish ministers. In paying for the business of FMEL (Ferguson Marine) by reducing FMEL’s liabilities to them, they believed that they were simply transferring their own money from one pocket to another, with the transaction having no impact on their overall obligations. The discovery that the choice of transaction structure had resulted in their being required to pay a little over £5million to a third party must have been highly unwelcome.
Scottish government spokesman:
We are aware of a summary judgment that has been made in the English courts in relation to the claim.
The Arran Ferry Action Group raises concerns about the absence of a key hull feature required for the Glen Sannox to operate efficiently at 14.5 knots. Additional confusion arises over the divergence of design between Glen Sannox and sister ship Hull 802, which were intended to be identical in design and specification. Chairman Sam Bourne:
It is such a terrible mess. The whole thing is complete confusion and it affects the performance of the boats. Fitting a ducktail now is bound to further delay the completion of the vessel. And if it is needed on 802 why is it not on Glen Sannox which has the same hull. You are going to have two boats that do not meet the spec that was given and are not identical. If one has it and the other hasn’t it just won’t meet the performance targets set. If the boats don’t meet the performance specifications, CMAL can refuse it and then who owns these vessels. If you have an inefficient hull form, they will cost more money to operate, and the green criteria they try to hit, you can throw those in the bin. Serious questions have to be asked of those who run the businesses at the time to allow this.
We are satisfied that the vessels meet the required specification, and are continuing to work closely with Transport Scotland, Scottish Government and Fergusons to manage the delivery of the two vessels.
Holyrood’s Rural Economy and Connectivity Committee publishes a report calling for “root and branch” reform of the system for procuring ferries and concluding that the established procedures are “no longer fit for purpose”. Former bosses at Ferguson shipyard, ministers, state-owned CMAL and Transport Scotland are all criticised. Committee convener Edward Mountain:
All parties involved must share in the responsibility for the catastrophic failure to deliver this contract on time or on budget. A lack of due diligence, poor project management and a failure by all parties to take the necessary action to resolve problems as they emerged means that the cost of the contract has increased from £97m to almost £200m while the island communities who are relying on theses ferries to be delivered continue to suffer.
We remain fully supportive of the efforts of CalMac, CMAL and Transport Scotland in delivering ferry services on the Clyde and Hebrides Network and to the Northern Isles, but we also recognise the challenges in doing so and the need for continuous improvement to optimise delivery. We have already committed to commission a study of the legal structures and governance arrangements which exist between the “tripartite group” of Transport Scotland, CMAL and CalMac and will publish a ferries stakeholder engagement strategy.
We have a successful track record of delivering ferry projects on time and budget and we are committed to continuous improvement of our processes, so steps are already being taken to further develop the planning process for new ferries.
The former chairman of Ferguson Marine says he is taking legal advice on whether the Scottish Government’s report on his management, drawn up after it took ownership of the yard, was defamatory. He says the report is aa “snow job” to cover up the role of Caledonian Maritime Assets Limited, the government agency involved in procuring the ferries. McColl says design changes by CMAL caused the delays. and cost overruns.
[Criticism of the management team is] outrageous and unacceptable – the team selected were some of the best in the UK, and head and shoulders above those in there now. I’ve asked if we can sue them for defamation of character. There needs to be an inquiry. The way they’ve handled this is incompetent.
McColl also challenged the Scottish government’s plan to spend £100 million completeing the ferries, which would write off more than £80m already spent on them, as well as the £45m in loans from the Scottish government that have already been written off.
You’d be better building from scratch and to a design that’s more suited to what’s needed. They could probably build three smaller vessels for less than £100m and it would give them more flexibility.
It emerges that the bridge of the Glen Sannox still has no windows almost two years after launch. Black shapes were instead painted on the control room of the Glen Sannox prior to launch by Nicola Sturgeon in November 2017. GMB Scotland secretary Gary Smith:
[An inquiry] will also need to establish why a ferry ‘launched’ nearly two years ago has no windows on its bridge. What appears to be windows is actually black paint.
Fake windows were painted on a couple of years ago. It’s thought it was to make the boat look more finished than it really is.
Speaking after meeting board members at the shipyard, Mckay says the new delivery schedule for the two ferries must be set by October.
We have always been clear that we want to complete the vessels, secure jobs and give the yard a future. On Friday, I met with the excellent workforce and stressed the Scottish government’s commitment to achieving the best possible outcome for the yard. Today, I convened the first meeting of the newly-established programme review board and tasked them with establishing a new delivery schedule for both vessels and a revised cost window. This group will help assess the current situation and ensure the effective and efficient delivery schedule of the CMAL ferry contracts as quickly as possible.
Gibson confirms the MV Glen Sannox will enter service in the summer of 2019:
Regarding deployment of the Glen Sannox on the Ardrossan route, it was confirmed to me on August 14 through a parliamentary question that it will enter service next summer, with a June delivery followed by two months of crew familiarisation and sea trials.