A letter from Ferguson Marine to Edward Mountain, the head of Holyrood’s transport committee, has revealed a fresh delay in Hull 802’s completion.
The chief executive officer of the Port Glasgow shipyard, David Tydeman, claimed that issues with the first ferry Glen Sannox (originally named Hull 801), including “deficiencies in work planning” and “inadequate rigour in stock control and handling” were to blame for the most recent delay to impact the unnamed second ferry (Hull 802). Along with that, he mentioned “errors made as the business recovered from administration and mobilised through the pandemic.”
The letter states: “For Hull 802, we have approached the delivery and budget review differently. Recognising the deficiencies in work planning we have experienced with 801, the gaps in OEM information, inadequate rigour in stock control and material handling, gaps in design data vs. the ‘as-built’ progress with 801 over the past few years and the considerable amount of re-work that became necessary through errors made as the business recovered from administration and mobilised through the pandemic, we have planned a different programme management for 802.”
A troubled history
The Port Glasgow shipyard entered administration in August 2014, but Jim McColl, a businessman who served on First Minister Alex Salmond’s council of economic advisers, purchased it a week before the independence referendum.
The next year, CalMac, a state-owned ferry operator, awarded his new company, Ferguson Marine Engineering Ltd (FMEL), a £97m contract to construct two dual fuel LNG vessels. However, the project ran into issues, and the yard was nationalised after returning to administration.
Disappointing but realistic timescales
As the company reallocate resources from Hull 802 back to the Glen Sannox in order to carry out the required work that has recently been identified, it’s clear that timings will slip. In the letter, Tydeman goes on to explain the specifics behind this and the impact it will have.
“The increase in work scope on 801 identified over the past three-months has diverted resources from 802 which has put pressure on the delivery date for 801 as noted above and has led to the structural completion of 802 previously planned for September, now moved to late November ‘22. As a result, the combination of a determined plan not to start outfitting until we have the outputs of the design cleansing efforts with ICE and a critical level of structural work completed, means we now forecast practical completion of 802 by the end of December ‘23. This, in turn, moves the final dry-docking of 802 into early ‘24 and associated trials and handover are now planned for 01 ‘24.”
Tydeman said in the letter that while the move of the handover date was disappointing, it represented a “positive more professional approach, for a realistic and deliverable handover for the summer season ‘24.”
“Whilst this move of the handover date for 802 from Q4 ‘23 into 01 ‘24 is disappointing, we believe that our up-front efforts on much more robust planning of 802 and learning from 801 can present this change of dates as a positive, more professional approach, for a realistic and deliverable handover in time for the summer season ‘24.”
Not all doom and gloom
Unfortunately, Ferguson Marine missed the boat a couple of years ago on the chance to carry out supply-chain work for the Type 31 Frigates being built on the east coast.
Then Defence Secretary Michael Fallon visited the Ferguson Marine shipyard at Port Glasgow in 2017 where he remarked upon the opportunity for the Clyde yard to build the new frigates. Babcock, Thales, BMT, Harland & Wolff and Ferguson Marine had teamed up to form ‘Team 31’ a consortium to bid for the Type 31 Frigate.
Babcock CEO Archie Bethel said:
“Team 31 will allow Babcock and Thales to take forward the key lessons from the Aircraft Carrier Alliance and apply them in a new and highly capable team with Harland & Wolff, BMT and Ferguson Marine.”
While Babcock eventually won the bid, Ferguson Marine was no longer able to receive any work due to the issues at the yard. After Harland & Wolff and Ferguson Marine both collapsed into administration, Bethel told the Financial Times that both yards would still “get a chance to bid” but the company “would not risk the programme” subcontracting work out to them.
On a brighter note for the yard as it exists today, Ferguson Marine also say in the letter that they intend to work with defence contractor BAE Systems “to re-engage with them as a supply-chain partner” for the eight, complex Type 26 Frigates being built upriver. Ferguson say that this third-party work will contribute millions to the costs of running the shipyard and help sustain workforce skills.
“The FMPG board also approved our acceptance of a letter of intent from BAe for FMPG to re-engage with them as a supply-chain partner for their T-26 programme. This type of 3rd party work will develop during the next 3-6 months, and we have assumed will contribute ~£6-7m to the costs of running the shipyard through to handover of 802 (thus reducing the costs charged to Glen Sannox and 801 in 2023/24 by this amount) and creating work for staff not required on the ferries as commissioning of Glen Sannox progresses through to handover.
Overall, the revised best estimates of costs to complete include assumptions on efficiency improvements, contributions from 3rd party work, allowances for inflationary pressures and other economic factors such as cost of living, energy costs, and, importantly, sensible estimates of contingencies that may be required.”
The third-party work on behalf of a military shipbuilder upriver in Govan requires quality, precision and exacting standards. It’s a very big deal when it comes to sustaining the future of the Port Glasgow yard and it, in my opinion, demonstrates the trust the shipbuilding industry has in the Port Glasgow shipyard.
A brighter, more transparent future
It’s no secret that the two vessels, Hull 802 and the Glen Sannox, will be more than £150m over budget and five years late.
The structural completion of Hull 802, which had been scheduled to begin in September 2022, will now happen in late November of this year. With final dry docking and trials finished by the first quarter of 2024, practical completion is now scheduled for the end of December 2023.
All of the above being said, activity at the yard appears to be increasing and if recent statements are anything to go by, I think the transparency the yard now appears to be committed to shows a far more professional situation than the yard’s workforce endured previously. Yes, there are setbacks – massive setbacks actually – but the largest shipbuilder in the country has given them a vote of confidence and that speaks volumes.