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End of turbines hope

BiFab blow as ‘no legal route’ for ministers to back yards

Battle for BiFab

Workers have campaigned to save jobs (pic: Terry Murden)

BiFab’s hopes of securing work on giant wind turbines have been delivered a final blow by the UK and Scottish governments who said they have “no legal route to provide further financial support” to the Fife yard.

A contract for eight of the 54 jackets required for the £2 billion Neart Na Gaoithe (NnG) wind farm collapsed last month after the Scottish government withdrew a £30m guarantee because of state aid rules.

A joint working group now being formed to consider future opportunities for the renewables supply chain in Scotland.

As Daily Business revealed on Tuesday morning, the UK government had already set this in motion ahead of issuing a joint statement with Scottish ministers on Tuesday evening.

In a statement, ministers in both governments said they have concluded that, in the absence of a shareholder guarantee provided by BiFab’s majority shareholder, JV Driver, “there is no legal route for either the Scottish or UK Governments to provide BiFab with the guarantees it would need to secure its contract with Saipem [Italy-based lead foundations contractor for NnG].”

They said the UK and Scottish Governments are committed to investment in renewables and clean energy. The development of a domestic renewables supply chain is a “key priority for both governments.”

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It added: “The UK and Scottish Governments are therefore convening a Joint Working Group to explore how existing policy measures can be used to strengthen the renewables and clean energy supply chain in Scotland, and look at options for the future of the sites where BiFab currently operates and other opportunities around Scotland, in a manner consistent with respective devolved and reserved competencies.”

Economy Secretary Fiona Hyslop said: “The Scottish Government has been working for more than three years to support BiFab.

“We have left no stone unturned in our search for a solution to the challenges faced by the business. As a minority shareholder, we have been exhaustive in our consideration of the options available to us to financially support BiFab from public funds.

“The Scottish Government has been clear that State Aid regulations are a barrier to us providing guarantees on the contract from Saipem to build foundation jackets for the Neart na Gaoithe (NnG) project. The UK Government has similarly concluded that there is no legal route for them to provide support.

“The situation at BiFab is a culmination of a number of issues, the main one being the unwillingness of the parent company and majority shareholder JV Driver to provide working capital, investment or guarantees for the company.

“We are determined to secure a new future for the yards in Fife and the Western Isles. We will explore options for the future of these sites and, through this new working group, work with the UK Government to strengthen the renewables and clean energy supply chain.”

Fiona Hyslop

Fiona Hyslop: ‘we left no stone unturned’

Scottish Labour’s economy spokesman Alex Rowley labelled the decision as “a devastating blow for the renewables industry and for jobs in Scotland”.

He added: “There has been a complete failure from both the UK and Scottish government to support jobs and to support the development of the renewables sector in Scotland.

“I once again call on the Scottish Government to publish the legal advice that led them to make a judgment to pull the guarantee.

Alex Rowley

Alex Rowley: ‘devastating for Scotland’ (pic: Terry Murden)

“There is no point of the SNP talking up a just transition when there are no jobs to transition.

“This is devastating for Scotland and should not be accepted. The SNP’s commitment to jobs isn’t worth the paper it was written on.”

In a joint statement from GMB and Unite, secretaries Gary Smith and Pat Rafferty said: “Until the Scottish Government publishes the legal advice over its decision to walk away from BiFab, all the difficult questions remain unanswered.

“This evening’s statement is also disappointing given that our members learned of this through the media – it makes a mockery of the so-called fair work agenda.

“The demise of Scotland’s best shot at building a manufacturing supply chain for offshore wind is down to a decade of failure from successive SNP and Tory governments.”

Failure of government over decades

Earlier, a spokesman for industry body Scottish Renewables told the Scottish Parliament’s Economy, Energy and Fair Work Committee that the UK had failed to invest in the industry over a long period and had been left behind by its competitors.

Its spokesman said investments in manufacturing and ports capacity “simply weren’t made”, leaving companies in Scotland at a disadvantage.

He said Denmark built its first offshore wind farm, the first in the world, in 1991.

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“Europe has moved since then to invest in manufacturing capacity and in ports capacity when the UK hasn’t – and that really is a fundamental failure of industrial strategy at government level for many decades.

“There was a position in recent years where Scottish yards competed against European yards very fiercely for jacket contracts and places like Belgium, Spain, were very competitive in that.

“That situation has very much changed. Now it is not just Scotland and the rest of the UK that is struggling to compete with Europe, Europe is struggling to compete with the Far East.”

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He said in Scotland “we have seen considerable lengthy delays in the offshore wind sector’s deployment.”

In contrast, he said “we’ve seen the English and Welsh offshore wind projects leap ahead”.

He added: “They have developed an enormous industry down there, places like Lowestoft in Suffolk and Humber are absolutely fundamental now to the largest offshore sector in the world, while in Scotland we are just beginning to develop the capacity.”

EDF Renewables UK chief executive officer Matthieu Hue said the company had “worked very hard” for the steel jackets for Neart Na Gaoithe (NnG) to be be manufactured at BiFab.

But he told MSPs: “Unfortunately, BiFab has not been able to follow through and provide the guarantee it needs to get on and sign the contract.”

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