Main Menu

Row over renewables

BiFab in administration amid ‘green myth’ claims

BiFab protest 2017

BiFab workers protested in Edinburgh in 2017 (pic: Terry Murden)

Engineering company BiFab has been placed into administration amid accusations from trade unions that the government’s renewables revolution is a ‘myth’.

BiFab had hoped to secure a £30 million manufacturing contract on eight turbine jackets for the £2 billion Neart na Gaoithe (NnG) wind farm project.

But the government said it was unable to provide a guarantee that would allow the contract to be placed at the company’s yards in Fife and Lewis. It also ruled out the prospect of nationalisation.

A statement from the company today said: “BiFab can confirm that the board has agreed to place the company in administration following the Scottish Government’s decision to remove contract assurances.

Newsletter

“The company has worked tirelessly to bring jobs into Fife and Lewis with some success.

“However, the absence of supply chain protections in Scotland and the wider UK have consistently undermined our ability to compete with Government-owned and Government-supported yards outside and inside the European Union.

“We would urge the Scottish and UK Governments to address these structural challenges as a matter of urgency in order to ensure that the benefits of offshore renewables are shared more widely with communities across the country.”

Responding to the announcement in a joint statement, trade union secretaries from GMB Scotland and Unite Scotland Gary Smith and Pat Rafferty said: “BiFab’s administration exposes the myth of Scotland’s renewables revolution as well as a decade of political hypocrisy and failure, in Scotland and the rest of the UK.

“The workers and communities dependent on these yards have fought so hard for a future and everyone was hoping that 2021 would finally be the turning point.

“Shamefully, the Scottish Government has buried these hopes just in time for Christmas and they have worked together with UK Government in doing so.

Pat Rafferty

Pat Rafferty: hopes buried (pic: Terry Murden)

“A decade on from the promise of a ‘Saudi Arabia of renewables’ and 28,000 full time jobs in offshore wind manufacturing, we’ve been left with industrial ruins in Fife and Lewis.”

The Scottish Government has argued state aid rules prevent it from bailing out the company and said a joint investigation with the UK government will explore ways to improve the supply chain process.

In the meantime, efforts will be made to bring new work to the site.

Follow Daily Business on LinkedIn

Scottish Economy Secretary Fiona Hyslop said: “I know this will be an extremely worrying time for BiFab’s workers and we will continue to do everything in our power to support them and stand ready to work with any company interesting in taking on the yards.

“The skills and dedication of the workforce is recognised throughout the renewables and offshore industry and will play an important role in our future energy ambitions.

“The Scottish Government has been working for more than three years to support BiFab through the financial difficulties it has faced and remains committed to securing a future for the yards and the workforce.

“As a minority shareholder, we have been exhaustive in our consideration of the options available to us to support BiFab. There is no legal route for either the Scottish Government or the UK Government to provide further financial support to the company as things stand.

“In order to successfully secure and deliver new contracts, BiFab required working capital, the provision of appropriate assurance packages by the shareholders, and plans for investment at the sites. Despite commitments made at the time of acquisition, this is something the majority shareholder JV Driver was not willing to provide to secure future work. 

“We will now work with the administrators and trade unions to secure a new future for the BiFab yards in Fife and the Western Isles, helping ensure they are able to diversify and compete in this competitive market.

Fiona Hyslop

Fiona Hyslop: we have worked tirelessly

“We have also committed to establish a joint working group with the UK Government to explore how existing policy measures can be used to strengthen the renewables and clean energy supply chain in Scotland.

“We continue to call on the UK Government to take more radical action to ensure that local renewables developments move away from a focus solely on price and better support the domestic supply chain.”

In order to save BiFab from closure in 2017, and to support delivery of SSE’s Beatrice Offshore Wind project, the Scottish Government invested £37.4 million through a combination of equity and loan facilities and converted this to a 32.4% equity stake in BiFab.

A loan facility of £15 million has also been provided to support working capital.

Scottish Labour economy spokesperson Alex Rowley, whose motion condemning the government was successfully back in Holyrood yesterday , said: “This terrible news will come as a hammer blow to workers across Scotland and exposes the fraud that is the SNP’s claims of a renewables revolution.

“The failure of the SNP government to work with the company and the trade unions to find a way forward is unforgivable and the consequences of that failure is that Scotland will continue to lose out on thousands of jobs in the renewable sector. 

“All possible options available to salvage the jobs must be put on the table. We cannot allow one of the jewels in the crown of Scottish manufacturing to be lost due to incompetence and a catastrophic lack of political will.”

Comment: BiFab has blown a hole in the SNP’s green and EU credentials



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.