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2 Mar, 2022

Ferries three years overdue, £110m cost overrun predicted

Production delay

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?

28 Jan, 2022

HCC wins £5m insurance judgement against CMAL

Judgement

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.

22 Jan, 2022

Ferry Action Group raises design concerns

Design Change

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.

CMAL:

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.

9 Dec, 2020

Holyrood committee report published

Financial Report

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.

Goverment spokesperson:

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.

CMAL:

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.

20 Dec, 2019

McColl: Ferries ‘should be scrapped’

Makes Statement

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.

7 Sep, 2019

Glen Sannox still without windows

Production delay

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.

Unnamed source:

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.

31 Aug, 2019

Administrator: Buyers expressing interest in yard

Makes Statement

Administrators for Ferguson’s say they have held talks with several potential buyers (the exact number is not known) and are “encouraged” by the interest so far. The yard will be bought by the Scottish government if a private buyer is not found within four weeks of the date of the firm going into administration. Deloitte:

The joint administrators are undertaking a sale process and are actively engaged in discussions with a number of potentially-interested parties, however it is early in the process and therefore it is not appropriate for us to comment further at this stage. We have been encouraged by the level of interest in the yard so far but would encourage any remaining parties who may have an interest to contact us.

The Scottish government:

Ministers remain committed to the completion of vessels, securing jobs, and working towards finding a solution to support future shipbuilding at the site. Deloitte, as administrator, is currently going through the process of market testing for a private buyer. We will also start work to determine the optimal structure for the yard to ensure its long-term future. Our first priority is to establish a new delivery programme to ensure the completion of the CMAL ferry contracts.

19 Aug, 2019

Mackay: Ferry delivery schedule must be set by October

Makes Statement

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.

16 Aug, 2019

Scottish government buys yard

Acquisition

The Ferguson shipyard is bought by the Scottish government. Ministers will now operate the yard under a management agreement with administrators Deloitte. The Scottish government wil buy the facility if no private buyer is found within four weeks. McColl, who could not persuade ministers to pay more than the £97m contract price for the disputed ferries, will no longer own the yard. The agreement means work on the CalMac ferries, and other contracts, can continue while efforts to find a commercial buyer get under way. Finance Secretary Mackay:

We have always been clear that we want to complete the vessels, secure jobs and give the yard a future. Public control will provide much-needed continuity of employment now and ensure the completion of the ferry contracts at the lowest possible cost to the taxpayer. It is absolutely essential that the outstanding contracts to build these two ferries are completed. [Putting the company into administration’ was not an outcome I was willing to consider.

What's this? This is an unbiased just-the-facts news timeline ('newsline') about CMAL, created by Newslines contributors. Make it grow it by finding and summarising news. Learn more