Financial strain for BiFab after Scottish Government says it has 'no legal route' to provide support

The UK and Scottish governments have no legal route to provide further financial support to Burntisland Fabrications (BiFab), according to a joint statement from both sides.

Last month, a £2 billion deal collapsed for BiFab to manufacture eight wind turbine jackets at its yards in Methil, Fife, as part of the Neart Na Gaoithe (NnG) project.

State aid rules for MSPs mean ministers are unable to bail out the struggling firm, with a joint working group now being formed to consider future opportunities for the renewables supply chain in Scotland.

Hide Ad
Hide Ad

The Scottish Government’s Economy Secretary Fiona Hyslop said matters were not helped by the firm’s Canadian-based owner JV Driver, which acquired BiFab in April 2018 after the Scottish Government rescued the company in 2017.

BiFab Methil picture: PABiFab Methil picture: PA
BiFab Methil picture: PA

Ms Hyslop added both governments will now attempt “to secure a new future for the yards in Fife and the Western Isles”.

She 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 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.”

Hide Ad
Hide Ad

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.

“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.”

Scottish Greens Energy Spokesman and Fife MSP Mark Ruskell also blamed the SNP and Tories, saying: “Time and again we’re told that state aid rules are the reason that the Scottish Government cannot take a greater stake in the company, yet we know that other European countries strategically invest in the energy market all the time.

“If Scotland is to benefit from our enormous renewable energy potential, we need to see bolder action from government.

“We need to see state interventions in the way other countries are completely comfortable with.”

Hide Ad
Hide Ad

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.”

STUC deputy general secretary Dave Moxham said: “The Scotland/UK joint government working group to be formed to consider ways to strengthen the renewables supply chain in Scotland is the thinnest of gruel.

“The abject failure of both governments to do anything to support Scottish workers – despite the ‘Saudi Arabia of renewables’ boast of each – is on show for all to see.”

A message from the Editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by Coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.



Want to join the conversation? Please or to comment on this article.