Nicola Sturgeon has “utterly” refuted allegations that a decision to award a major ferries contract to an ally of the Scottish government was “jobs for the boys”.
The first minister told MSPs there was nothing improper about her government’s decision to give a £97m contract to build two ferries in 2015 to Jim McColl, a financier who had advised Scottish ministers on the economy and was a political ally of her predecessor, Alex Salmond.
That contract, which is under investigation by Holyrood’s public audit committee and Scotland’s auditor general, has since become a major scandal which has raised questions about the Scottish government’s economic competence and judgement.
The vessels are at least five years late and will cost at least £240m to complete, leaving Hebridean islanders experiencing repeated delays, cancellations and break-downs with their state-owned ferry services, run by CalMac. They are due to enter service next year.
In 2019 Sturgeon’s government was forced to nationalise the shipyard, Ferguson Marine (FMEL) near Port Glasgow, after repeated disputes and problems with the contract, which had led to a £45m government bailout.
Sharon Dowey, a Conservative MSP on the audit committee, challenged Sturgeon on why McColl, who had no prior experience running a shipyard, had been given the contract ahead of nine other bidders. “Was it jobs for the boys?” she asked.
The first minister replied: “I completely and utterly refute [that suggestion]. If you’re saying was there anything untoward in this procurement process, in order somehow to inappropriately steer this contract towards FMEL, absolutely, categorically, not.”
She said there was a powerful public and strategic argument in favour of ensuring Ferguson was saved and that it completed the contract, given it was the last commercial shipbuilder on the lower Clyde, and that thousands of jobs were at stake.
Sturgeon confirmed, however, that the auditor general, Stephen Boyd, and Transport Scotland officials are investigating allegations made in a BBC Scotland documentary last month that Ferguson was secretly given preferential treatment during the bidding process.
The Disclosure documentary alleged that Ferguson was leaked the full contract specification for the vessels drawn up by CMAL, the state-owned ferry company in charge of the contract. The BBC alleged that Ferguson’s copied that specification almost entirely, totally revised its bid and cut its price, midway through the bidding process.
Ferguson’s was also given the contract without the normal bank guarantees in case it could not finish the vessels – an “red flag” issue raised by CMAL with ministers when they were deciding whether to award Ferguson’s the contract.
CMAL’s executives told Derek Mackay, the then transport minister, they would much rather scrap that tendering process and start again because they were not convinced Ferguson’s bid was robust enough.
But by then, Sturgeon had already taken part in a widely-publicised event at the shipyard to celebrate its selection as preferred bidder for the contract. Dowey suggested that made it harder to back out of it.
Sturgeon said that was irrelevant. Ministers approved the deal in October 2015 because CMAL had put in place “mitigations” that allowed any financial risks to be managed. She said had she been presented with the same information then, she would still have approved the deal.
But with the advantage of hindsight, ministers now agreed the contract had been badly mishandled. Transport Scotland, CMAL and the government had greatly strengthened their contract processes and ensured outside experts were involved.
Sturgeon had begun her evidence by acknowledging that the delays and disputes with the ferries was of “very significant” concern. “I am acutely aware that the delay is having a very significant impact on island communities – that is a matter of considerable regret,” she said.
