Ferguson’s wins £97m ferry contract
Ferguson’s wins a Scottish government contract to build two new ferries. The deal, which is worth about £97m, was confirmed at the SNP’s annual conference in Aberdeen by Transport Minister Derek McKay.
Scottish government buys yard
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.
Holyrood committee report published
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.
Shipyard to recruit 120 extra workers
Ferguson Marine announces it is hiring 120 extra staff, mostly pipe fitters and steel workers. The extra workers will mean the shipyard can be in production seven days a week during spring and summer and will bring total number of staff to more than 500. The new workers will be working on MV Glen Sannox and hull 802 for at least six months. Turnaround Director Hair:
Last year was challenging, with disruption created by the pandemic, but we’re confident we can increase momentum in 2021. We are confident, despite many challenges, 2021 will be a pivotal year in securing the long-term future of the shipyard. We must do everything possible to deliver the dual fuel ferry programme, improve productivity, secure contracts for future vessels, and protect local jobs.
Chairman and board member step down
Chairman Alistair Mackenzie and board member John Hudson both step down from their roles at Ferguson marine for personal reasons. Mackenzie:
I have decided for personal reasons that now is the right time to stand down. I have been proud to serve on the board of Ferguson Marine, supporting the business during a highly challenging period as it recovered from administration and through a transformation programme. Working with the wider board and senior management team, significant progress has been made to improve governance, processes and systems and to strengthen the workforce.
I would like to thank John Hudson as he departs, as well as the wider board and shipyard workforce, for their commitment and support during the last 18 months. With the arrival of a new chief executive, and three new board members in the coming months, I am sure the shipyard will continue to strengthen.