THE SNP HAS COST taxpayers some £200m by failing to complete two hugely over-specified ferries in such an astonishing display of incompetence that other motives have been alleged.
Asked by MSPs why the SNP Government had chosen the most expensive of six tenders to build the ferries, Roy Pedersen, a member of the Scottish Government’s Ferry Industry Advisory Group, said: “I don’t know the answer but three things spring to mind – one is incompetence, the other is vested interest and the other is corruption.”
Another member of the Ferry Industry Advisory Group, Alf Baird, a former professor of maritime business at Edinburgh Napier University, said the contract that was awarded was “specifying what is in effect a mini-cruise vessel to run a utilitarian shuttle ferry which is basically a bus.”
Pederson said the SNP is “building a ship with a far higher specification, far higher expense to build, far more expensive to operate than necessary”. He said: “Why build a ship with a capacity of 1,000 passengers for a route, namely the Uig routes, on which there has never been more than 312 passengers carried on any sailing, and when the average carryings are half that and in the winter time even less than that?”
Indeed, all very puzzling.
When Ferguson Shipbuilders Ltd went bust in the summer of 2014, it seemed that the closing of its shipyard in Port Glasgow would be the final nail in the coffin for shipbuilding on the lower Clyde. Within weeks, however, the yard was purchased by Scottish business tycoon Jim McColl’s Clyde Blowers Capital (CBC).
In August 2015, Ferguson, now called Ferguson Marine Engineering Ltd (FMEL), was granted a £97 million contract by Caledonian Maritime Assets Ltd (CMAL) to build two ferries that would begin service in the first half of 2018. CMAL is run by the SNP government – it owns and manages the harbours, ports, ferries and infrastructure for ferry services on the Firth of Clyde, the west coast, and the Northern Isles. CMAL and associated nationalised companies perform a valued function for the SNP in employing various failed SNP politicians, such as former fire officer Stewart Maxwell, an MSP who lost his seat in 2016 and then served as special adviser to First Minister Sturgeon.
On the announcement of FMEL’s successful bid, Ms. Sturgeon had this to say:
“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. Today’s announcement proves that Scottish shipbuilding can succeed in a competitive market, with the FMEL team submitting the highest quality bid that offered best value for money.”
As with many Sturgeon announcements, this turned out to be somewhat optimistic. A row soon began between FMEL and CMAL as the shipyard was told to begin construction before design and build specifications were agreed, and soon ran out of money. FMEL claims that the SNP quango repeatedly changed designs and incorporated “unforeseen complexity” into its demands for the two hybrid ferries. Jim McColl, the Scottish businessman owning FMEL, claims that Sturgeon announced its successful bid before negotiations were even completed. More concerning is that the quango seemed to ignore the fact that Ferguson did not even have the space to build the two ships side by side in their shipyard.
The MV Glen Sannox was nevertheless launched by Sturgeon on the 21st of November 2017 to much fanfare, despite it being only partially built. Windows were painted on to the ship to make it look less unfinished and less embarrassing to Sturgeon. It has been in the water, semi-finished, for four years now – accumulated rust and water damage will now have to be repaired alongside significant further work. The second ferry, known only as Hull 802, has never left drydock.
In August 2019, Ferguson revealed that it was heading into administration – the SNP had refused to give in during negotiations with the shipbuilders as costs piled up and the two ferries were running behind schedule. SNP ministers quickly began talks with Deloitte, the yard’s administrator, to nationalise it and continue work – neither FMEL nor CBC, its owners, were consulted during this process. Previous loans worth £50m were written off as the Scottish government finalised nationalisation and began paying the wages of the 300 employees with public money.
Within those loans was a clause, inserted by the SNP, that would allow the Scottish government to buy the shipyard for £1 in the case of its going into administration. Confidential documents revealed by the Herald show that the SNP new FMEL was in serious financial trouble more than two years before it actually fell into insolvency. Ferguson’s former management have accused the SNP of creating a secret path to nationalisation in order to take over the yard – deliberately keeping them out of negotiations as backstage plans to take over were finalised. They have also pointed out that since nationalisation, an extremely valuable Royal Navy contract to build five Type 31e Frigates, which would have provided work for six to eight years, was lost. FMEL’s HySeas III consortium, a team of engineers who pioneered work on seaborne hydrogen propulsion systems that had won Innovation of the Year at 2019’s GreenTech Awards, was disbanded by the SNP.
By January 2020, more than two years after both of the ferries were due to have begun service, Tim Hair, the SNP-appointed turnaround director for the yard, announced that the ferries were “significantly less than half built” and that 95 per cent of the ships’ designs had still not been agreed with CMAL. To continue working on the project, £110 million more would be required, as well as new naval architects and marine engineers.
In August 2020 it emerged that work on the costly redesign of the MV Glen Sannox, greenlit by SNP ministers, was being carried out in Romania. A contract worth £2.12 million had been granted without going to competitive tender to International Contact Engineering Ltd, nominally based in the Isle of Man but with the work taking place in its Romanian operating base.
Costs have added up during the Coronavirus pandemic. The nationalised yard has been closed twice, for four months last year and for four weeks in January, costing £3.3 million and £1 million respectively. The yard is now scrambling to recruit 120 seven-days-a-week workers to accelerate the plagued production process, but is refusing to employ anyone from overseas.
A 129-page cross-party committee report, published in December last year, was a damning indictment on CMAL and the SNP’s procurement disaster. It called for a “root and branch” overhaul of the ferry procurement process and savaged the SNP for a catastrophic six years of failure after failure.
The SNP islands minister Paul Wheelhouse responded, saying that he was “disappointed” that the committee had not placed more blame on FMEL. He failed to make any reference to the hundreds of millions of pounds of taxpayer money that had been lost, instead stating that “there are some conclusions in the report with which we do not agree”.
The two ferries were expected to be ready by 2023, but a further delay to the delivery of the ferries has just been announced, with the shipyard nationalised by the SNP telling MSPs that it was ”not possible to provide a definitive schedule for completion of the vessels at this time”.
This project was due to last three years and cost £97 million. Instead, it will now take at least eight years and cost at least £258 million, provided there are no extra costs in 2021 or 2022, which is highly unlikely. Just last week an additional bill of £5m came in from insurers. Jim McColl believes the ferries will cost at least £300m and ferry expert Roy Pederson says it would be better to scrap them and start again.
The Times reports an equally bleak picture across the CalMac fleet in terms of upkeep and new vessels. Since the SNP took power in 2007, the rate at which new vessels are produced has more than halved. The fleet replacement rate has also suffered dramatically. Between 1993 and 2007 a vessel was replaced every 14 months – with the SNP in power, only every 37 months is a vessel replaced. Ferries have a design life of around 25 years. Pre-SNP, the entire fleet would be replaced in 36 years. That is too slow. But it is faster than the current rate – 87 years, under the SNP’s management. SNP ministers have hired the same consultants to review West coast ferry arrangements as they used to rubber-stamp the Scottish Government’s £575m guarantee to dodgy industrial tycoon Sanjeev Gutpa. Under a continued SNP government the future of ferry travel on the Scottish coast appears to be dying a slow death.
This shocking affair is a failure of the SNP on every count. It has wasted public finances with a recklessness and incompetence that beggars belief, causing the failure of a private shipyard while plotting its takeover. This is not an anomaly. Similar disasters occurred at Bifab, where £50m was lost after it went bust; Our Power Energy, where £12.5m was lost; and at Scottish Enterprise, the SNP quango which squandered £95m on a number of firms that failed. Another disaster is currently unfolding at Lochaber Aluminium, where the SNP committed £575m of taxpayers’ money to a business that is now in the process of collapse. Is the SNP just clueless, or has something more sinister than incompetence been happening?
Max Young is an undergraduate student at the University of Edinburgh.