Police have stated they are not looking into allegations the ferry contract given to businessman Jim Mcoll’s Ferguson Marine was manipulated.
This is despite the fact an SNP-led council is the latest to call on Police Scotland to open an investigation into reports that Ferguson Marine was given preferential treatment for the contract by ministers.
Following ongoing questions about the legitimacy of the £96m contract awarded to Ferguson Marine in October 2015 to provide two lifeline vessels for the Calmac fleet, North Ayrshire Council, which is governed by a minority SNP administration, decided to take the rare move.
According to the SNP-controlled council, the state-owned ferry company Caledonian Maritime Assets Limited (CMAL) was “effectively instructed” to grant the contract for the ships. Allegations have been made that the announcement of the contract award was hurried in order to be presented at an SNP conference.
Police Scotland, however, stated that they are “not investigating any criminality at this time”.
The furore follows recent claims made in a BBC documentary that Ferguson Marine got a 424-page document from a design consultant outlining the technical specifications for state-controlled ferry operator CalMac, while other bidders were forced to depend on a smaller 125-page specification. According to CMAL, this was not provided by them, and it appeared that it was recognised that this was given by an outside consultancy.
It’s 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 (FMPG) 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.
“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.”Babcock CEO Archie Bethel
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.
Third party work is expected to contribute millions toward operational costs
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 says this third-party work will contribute millions towards 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.
Looking forward to 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.