Public inquiry call
Ferries contract decision ‘remains unexplained’
UPDATE: Scottish Tory transport spokesman Graham Simpson today led calls for a public inquiry into the Ferguson Marine ferries fiasco following publication of a damning report by the public spending watchdog.
Scottish government ministers have still not explained why they ignored the concerns of their own operator and awarded a contract for two ferries to Ferguson Marine on the Clyde, according to the report by Audit Scotland.
Ministers approved the contract award to the company in October 2015, despite “significant risks” caused by its inability to provide mandatory refund guarantees and the severe misgivings of Caledonian Maritime Assets Limited (CMAL), the state-owned corporation responsible for ferry services.
“There is insufficient evidence to explain why Scottish ministers made this decision,” says the report from Audit Scotland.
As the project progressed, delays, costs, and a contract dispute between CMAL and Ferguson Marine Engineering Ltd (FMEL), escalated.
Despite CMAL and the Scottish Government intervening to support the project, FMEL entered administration in August 2019, with the Scottish Government bringing the shipyard into public ownership.
Auditor general Stephen Boyle accuses ministers of a “multitude of failings” which allowed costs to hit £240 million – two and half times the original price [£97m] – and with “no clear understanding of what this level of expenditure has achieved”.
Mr Boyle’s report says major problems remain unresolved more than two years after the Scottish Government took over control of the shipyard and the ferries are now almost four years late with “no certainty on when they will be complete”.
“The failure to deliver these two ferries, on time and on budget, exposes a multitude of failings. A lack of transparent decision-making, a lack of project oversight, and no clear understanding of what significant sums of public money have achieved. And crucially, communities still don’t have the lifeline ferries they were promised years ago.
“The focus now must be on overcoming significant challenges at the shipyard and completing the vessels as quickly as possible. Thoughts must then turn to learning lessons to prevent a repeat of problems on future new vessel projects and other public sector infrastructure projects.”
Speaking after a parliamentary debate, Tory MSP Mr Simpson said: “Scotland’s island communities have suffered enough as a result of the SNP’s epic incompetence.
“The very least they – and all Scottish taxpayers – deserve is a full, independent public inquiry into the SNP’s ferries fiasco.”
Scottish Labour’s transport spokesperson Neil Bibby, said: “This is a damning report and ultimate responsibility for this nine-figure fiasco lies squarely with the SNP government.
“They have spent years trying to dodge responsibility and point the finger elsewhere, but right from start this has been driven by the SNP government’s poor judgement and lack of leadership.
“Their relentless incompetence has left island communities waiting years for new lifeline ferries, taxpayers picking up an ever-growing bill, and Scottish shipyard workers fixing problems they didn’t create.
“While Ministers have come and gone, the First Minister has been a constant presence throughout this fiasco.
“The First Minister must finally take some responsibility for the mess her Government has created, and set out a real plan for how they will stop costs spiralling, prevent any more delays and build a sustainable future for the yard and for Scotland’s shipbuilding industry.”
Among a number of management and ministerial changes of responsibility for the ferries, chairman Alistair Mackenzie and board member John Hudson stood down in January “for personal reasons”.
Tim Hair left his post as turnaround director and David Tydeman became Ferguson chief executive in February. He is expected to give an update on the delivery of the vessels before the end of this month.
A further government commissioned report compiled by EY, the accountancy firm and consultancy, has yet to be published but is expected to recommend reform of ferry procurement.