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Ferguson named preferred bidder

McColl’s shipbuilding faith repaid with £97m ferry order

Ferguson ShipbuildersJim McColl’s investment in Ferguson Marine Engineering has secured an early success after being named as the preferred tenderer to build two ferries for the Caledonian Maritime fleet.

The £97 million contract will create and safeguard jobs at the Clyde shipyard which Mr McColl bought out of administration last year.

It follows his pledge to invest more in the yard and significantly increase the workforce. He has been eyeing ferry contracts since acquiring the yards and is in the process of a major rebuilding project at the Port Glasgow facility.

His faith in resurrecting commercial shipbuilding has now been rewarded. See analysis and comment here.

First Minister Nicola Sturgeon said: “This is an excellent result for Ferguson Marine Engineering Limited and I am delighted to name them as preferred tenderer for the contract to build two new ferries, the largest commercial vessels to be built on the Clyde since 2001.

“This contract will see the 150-strong workforce retained and more staff taken on at the shipyard, underlining our commitment to creating the vital jobs needed to boost local economies and help stimulate growth across Scotland.

“The Scottish Government is committed to supporting ferry users around Scotland by providing safe and reliable services, and this is the latest step to ensuring we have a fleet that continues to deliver for the communities that depend on it.”

Transport Minister Derek Mackay added: “This is a significant investment that proves Scottish shipbuilding can succeed in a competitive market, with the FMEL team submitting the highest quality bid that offered best value for money.

“The vessels themselves will be ‘dual-fuel ferries’, allowing them to use cleaner fuel and future-proofing them for the advent of tighter regulations around sulphur emissions. This announcement will strengthen our ferry fleet, ensuring they will be able to benefit the communities that need them for decades to come.”

Erik Østergaard, chairman of Caledonian Maritime Assets, said: “I am delighted that we are able to name FMEL as the preferred tenderer for this contract and be in a position to enter discussions with them on the final terms and conditions. Subject to agreement on all points, we hope to be in a position to finalise the award of the contract later in September.

“We have undertaken a complex process of technical evaluation to ensure the new vessels will meet CalMac Ferries Ltd’s rigorous requirements on capacity, speed, draft and dual fuel capabilities, including the ability to operate to a wide number of harbours and routes over their lifetime. We are confident that the specification from FMEL can deliver on all of these conditions.

“We have worked with the team at Ferguson’s on the build of previous vessels for our fleet and most recently on our three smaller hybrid ferries and we look forward to continuing this successful relationship.”

CMAL, on behalf of Scottish Ministers, intends to award the contract to FMEL following a rigorous procurement process. CMAL will confirm the contract award in due course, subject to agreement on final terms and conditions.

FMEL will undertake the detailed design and construction work of new vessels, as well as their testing, equipping, launching and delivery.

The new ferries will be ‘dual-fuel’ vessels so they can operate on liquefied natural gas (LNG) and marine diesel. LNG is significantly cleaner and has been adopted by ferry operators in Northern Europe in response to tighter emissions regulations.

The first ferry is expected to be delivered in early 2018, with the second vessel following a few months later.

It is CMAL’s intention to award the contract to FMEL following the required 10-day standstill period and subject to agreement on final terms and conditions between FMEL and CMAL over the next few weeks.

The ships are designed to carry 127 cars or 16 HGV’s or a combination of and up to 1000 passengers.

From an efficiency and emissions perspective they are designed to operate on either marine diesel or LNG, where benefit will be gained by a marked reduction in CO2 and sulphur and nitreous oxides emissions.

The new ferries are earmarked for the Ardrossan-Brodick and the Uig Triangle routes, although the final decision on vessel deployment rests with the current operator, CalMac Ferries Ltd, and will be informed by further analysis of demand on all major routes. The vessels they replace will be cascaded throughout the network, with no further details available at this time.

Analysis and comment here

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