The Scottish Parliament’s Rural Economy and Connectivity Committee announced last week that it would be holding an inquiry into the shambles that is the Scottish Government’s latest ferry procurement contract. It is a vital first step in understanding what has gone wrong, and why.
To recap briefly, it was back in the summer of 2014, just before the Scottish independence referendum, that the then First Minister Alex Salmond stepped in to “save” the Ferguson yard in Port Glasgow, which was at risk of closure. A deal was agreed with Jim McColl, one of Scotland’s wealthiest people and a close associate of the First Minister (and not only a Scottish Government economic advisor, but also the leading business voice in the 2014 Yes Campaign).
Subsequent to McColl and his team taking over Ferguson’s, and making substantial investments in the facilities, the yard was awarded the contract for two vessels required by CMAL, the parent company of ferry operator Caledonian MacBrayne.
Fast track five years, and a great deal has gone wrong. The two ferries lie in the yard uncompleted, still years away from delivery, whilst the island communities who desperately need them are left waiting. The initial cost of £97m has more than doubled, with additional sums of at least £110m now required to complete the two vessels. In McColl’s view, it would be cheaper to scrap the two half-built ships, and start again.
In the autumn of last year, Ferguson’s was nationalised by the Scottish Government, and are now in public ownership.
In a statement to the Scottish Parliament just before Christmas, the Finance Secretary Derek Mackay put the blame for this fiasco firmly at the door of McColl and his management team, telling Holyrood: “It is difficult to over-emphasise the disastrous impact that the absence of proper management processes had on the yard.”
Unsurprisingly, this version of events is hotly contested by McColl, who described this analysis as “outrageous”, and has threatened legal action for defamation. It is to be hoped that the Holyrood inquiry that has been established under the convenorship of my Conservative colleague Edward Mountain will shine a light on what exactly has gone wrong, and whether it is Mackay or McColl’s version of events that more closely accord with the facts. But it seems to me that there are two key questions which the inquiry needs to find answers to.
Firstly, if it is the case that, as the Scottish Government claim, the management of the yard was so woeful that it could be described as “disastrous” by a member of the Scottish Cabinet, why on Earth was this contract worth £97m of tax payers’ money awarded to the yard in the first place?
What due diligence was done by the Scottish Government about the capacity of Ferguson Marine, and its management team, to fulfil the contract? And, what promises were made by the then First Minister, Salmond, to McColl, at the time the latter took over Ferguson’s in 2014, about the award of these ferry contracts – was there essentially a handshake between the two men and an understanding that if the yard was saved, then the contracts would follow?
Secondly, why, if the management at Ferguson’s were so lacking, did it take the Scottish Government four years before they stepped in to try and resolve the issue? Should alarm bells not have been ringing much earlier in the process? McColl himself is on record as saying that he asked the Scottish Government on numerous occasions for assistance in the difficulties he was having with the leadership of CMAL, but ministers refused to act. How much public money might have been saved if ministers had listened to his warnings?
To get to the answer to these questions, it is essential that the Holyrood committee hears from the relevant Scottish Government ministers, including Mackay himself. It is also essential that Jim McColl is able to have his say, and he signalled at the weekend not just his willingness to testify to the inquiry, but also his preference that this should be done under oath. It would be scandalous if this opportunity is missed.
But there is another individual who should also be heard as a witness by the committee, and that is Salmond. He was heavily involved at the time of McColl’s takeover of Ferguson Marine in 2014, and the committee needs to hear from him as to what was the understanding between him and McColl was about future ferry contracts.
Due to the constraints of a parliamentary committee, it is unlikely that this inquiry will be able to provide all the answers.
It will, however, be an important step forward in finding out the truth about an episode which has led to a scandalous waste of public funds. And it will only have credibility if both McColl and Salmond are able to be questioned as to their involvement.
Murdo Fraser is a Conservative MSP for Mid Scotland and Fife