HOPES a troubled state-owned shipyard could be awarded a major ferry contract have been dashed by the Scottish Government – as it unveiled a new funding package to “secure” its future.
Deputy First Minister Kate Forbes on Tuesday poured cold water on Ferguson Marine’s hopes it would be awarded a £175 million contract to build new small electric ferries for CalMac.
The contract will be put out to tender but Forbes has effectively ruled out the Port Glasgow yard from taking it on, saying that to do so “introduces substantial risks and uncertainties for the shipyard and the communities which rely on the lifeline vessels”.
But she has unveiled a funding package worth up to £14.2m over the next two years, subject to legal analysis and independent financial and commercial assessments to be completed in the autumn.
The money is intended to put the yard in fit shape to bid for and secure new work, amid concerns about its operations because of the lengthy delays in the construction of the Glen Sannox and the Glen Rosa.
Meanwhile, talks between the yard, the Government and BAE Systems to allow Ferguson Marine to take on more work on the defence giant’s Type 36 Frigate programme are at their final stages.
BAE appears optimistic more work building warships will be secured for the the Port Glasgow yard.
A company spokesperson said: “BAE Systems has a good working relationship with Ferguson Marine, which is a key local supplier of structural steelwork and has built two units for the Type 26 programme.
“We are in advanced negotiations with the company regarding further strengthening our partnership, the placement of additional work subject to agreement of terms and its continued involvement in the programme.”
Forbes said that as the Glen Sannox neared completion, ministers’ attentions were focused on the yard’s “next phase”.
Glen Rosa was launched in April this year but the Glen Sannox was hit by further delays that month, with bosses blaming a “lack of available expert knowledge and qualified resources in the UK” to properly build its liquefied natural gas dual fuel propulsion system.
After further delays, is now expected to be delivered by the middle of August.
Forbes (above) said: “The board has developed a business plan that it believes has the potential to secure a competitive future.
“Subject to independent legal and commercial analysis, the Scottish Government will provide significant new funding to support the yard’s modernisation and improve productivity.
“Additional funding goes hand in hand with winning new commercial contracts, and it is extremely good news that talks with BAE Systems to secure further work have reached this advanced stage.
“Extensive analysis and legal advice confirm that a direct award of the small vessels phase one contract to FMPG introduces substantial risks and uncertainties for the shipyard and the communities which rely on the lifeline vessels, due to the strict conditions imposed by the UK Subsidy Control Act.”
The Deputy First Minister said that the Government would instead do “everything which is legally possible to support the yard and the workforce to secure a long-term future”.
She said the Government had come to an agreement with the yard’s management “on initiatives and funding to improve productivity”.
Forbes added: “When the Scottish Government stepped in to save [Ferguson Marine Port Glasgow] in 2019 we did so to preserve jobs and develop the next generation of shipbuilders on the River Clyde.
“That commitment remains unwavering. The company will of course be able to consider a bid, either individually or in partnership with other yards, but its long term future depends on winning work on a competitive basis.”
Willie Rennie, the Scottish LibDems’ economy spokesperson, said: “We’re all praying that the SNP Government don’t repeat the horrific mistakes of the last two ferries built at Ferguson Shipyard although the loss of the expertise provided by David Tydeman is a great concern.
“The decision to opt for a competitive tender process is risky as the yard needs a regular drumbeat of orders and work to maintain the skilled workers essential for the construction of the ferries.”
Chris McEleny, the general secretary of the Alba Party who has been campaigning for Ferguson Marine to be directly awarded the contract, added: “This is nothing short of a betrayal of the people of Inverclyde and the workforce at Ferguson’s in Port Glasgow.
“I have been campaigning for the Scottish Government to directly award this work to Ferguson’s, warning them that if they did not then there would be no steel left to cut at the yard, no work left and no orders in the pipeline. This means one thing and one thing only - the closure of the yard.
“The Scottish Government should be under no doubt: their decision today not to directly award this work to Ferguson’s has put shipbuilding on the lower Clyde on the verge of extinction.
“And I am ashamed to say that this hasn’t been done by a Labour or a Tory Government but by an SNP Government that has sadly lost its way.”
