Ogilvie blast SFT’s public sector project ‘failure’

Ogilvie Group attacked what it called the 'failure' of the SFT construction programme. Picture: Getty Images
Ogilvie Group attacked what it called the 'failure' of the SFT construction programme. Picture: Getty Images
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CONSTRUCTION firm Ogilvie Group has accused the Scottish Futures Trust (SFT) of failing to deliver “much-needed” public sector projects such as schools and hospitals.

The Stirling-based company, which has diversified from the building sector into areas including fleet hire and IT, launched the scathing attack in its accounts, which showed profits were steady despite a dip in sales.

The SFT was one of First Minister Alex Salmond’s flagship policies during the SNP’s first term in office and was designed to replace the previous private finance initiatives (PFI) and public-private partnerships (PPP).

The body has developed into a cost-saving agency, bringing public sector bodies such as the emergency services and libraries together to negotiate joint contracts with builders.

Writing in the directors’ report, finance director John Watson said: “Ogilvie Construction results remain acceptable despite turnover dropping, due in part to the continuing failure of the SFT to deliver much-needed public sector works, especially in the healthcare and education sectors.”

His criticisms came despite the firm being named as the preferred bidder on the £10 million Bucksburn and Newhill primary schools in Aberdeen under the SFT’s “northern hub” scheme.

Watson’s comments came as Ogilvie Group posted a 2 per cent dip in turnover to £169 million for the year to 30 June, with pre-tax profits flat at £2.7m.

Revenues in its construction and house-building businesses dropped to £58m from £71m, with operating profits sliding to £477,000 from £1.7m.

Watson said: “The directors will continue to resist unrealistic and unsustainable pricing levels in the market and will strive to target key clients in the private sector with the aim of securing negotiated contracts.”

Construction projects in the past year have included work on the conversion of 1 Princes Street in Edinburgh into a Motel One hotel, the Renaissance Golf Club in East Lothian and an £8m swimming pool and sports centre in Montrose.

The diversification strategy at the group – which began life in 1946 as a construction firm – continued to pay dividends, with revenues from its fleet hire arm rising to £105m from £98m and operating profits rising to £2.5m from £2.1m.

Profits at the fleet hire business were boosted by “buoyant” used car prices and by its expansion into Northern Ireland, where the directors “anticipate significant growth”.

Ogilvie Fleet is now ranked as one of the 20 largest hire companies in the UK, with a collection of more than 10,000 vehicles and clients including Audit Scotland, Bargain Booze and Westminster City Council.Barry White, SFT’s chief executive, said: “SFT leads on one of the largest additional infrastructure programmes to be seen anywhere across Europe, with over £1.6 billion currently in procurement and with work to start soon on projects valued at over £700m.

“There are many, top-quality Scottish firms benefiting from this additional construction work.”