Rescued Ferguson shipyard could create more jobs to complete controversial ferry project

Economy Secretary, Derek Mackay, outside newly nationalised Ferguson Marine shipyard after the inaugural meeting of the Programme Review Board.
Economy Secretary, Derek Mackay, outside newly nationalised Ferguson Marine shipyard after the inaugural meeting of the Programme Review Board.
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More jobs could be created at newly nationalised Ferguson Marine in order to complete the two vessels which nearly sank the shipyard, Scotland's economy secretary Derek Mackay has announced.

Speaking after the first meeting of the Programme Review Board, set up by the Scottish Government to run the yard, Mr Mackay suggested that workers who had been made redundant as Ferguson Marine faced administration, may be rehired.

However, he admitted that the Board had not yet looked at the firm's books, but said the aim was to ensure the ferries were completed at the "lowest possible cost to the taxpayer".

The Board was established last week to rescue the Port Glasgow shipyard as it faced administration after a huge over-run on a contract to complete two Caledonian Maritime Assets Ltd (CMAL) ferries. Ministers effectively nationalised the shipyard under an agreement with the administrators which will see them buy the facility if no private bid emerges within the next month.

The yard, which employs 300 staff, had faced closure five years ago, but was saved by SNP economic adviser and billionaire businessman Jim McColl, and then won the £97m public contract to build the two ferries for Caledonian MacBrayne. However as costs mounted, the Scottish Government loaned £45m to Ferguson Marine in an attempt to get the ferries completed - money it may now have to write off.

READ MORE: Ferguson Marine shipyard to be nationalised by Scottish Government
One ferry, MV Glen Sannox, is more than a year late and the second, Hull 802, is nearly two years behind schedule. Ferguson has blamed the hold-ups on “interference and disruption” by Caledonian Maritime Assets (CMAL), the government-funded company which buys and leases the CalMac ferries.

However today Mr Mackay talked up the prospects of the yard, and said: "I see Ferguson's being scaled up from where it is today - that will have to be the case to complete the vessels. There were a number of people let go as the company was heading for administration and we want to make sure we have the right people here to complete the objectives of completing the vessels under construction and giving the yard a future."

Asked if there could still be more costs, he said: "We will have to undertake a full cost analysis to be able to set out what will be required to complete these vessels and that's what we're undertaking... that process, that work, is under way now.

"We will have to look at the expertise in terms of what will be required to complete the vessels - that if the government had walked away would never have been complete, the yard would have been closed and the jobs lost.

"I'm now setting about bringing together the necessary information to give reassurance that the vessels will be completed and be completed at the lowest cost to the taxpayer."

He added: "We will bring in the necessary expertise to complete the objectives - which is to complete the vessels under construction and give the yard a future. The inaugural meeting was to bring together key people to take that work forward.

"This is essentially the first full day of government control. In terms of the contract that we had, it was a fixed price contract and clearly that's not been delivered and the yard was heading for administration and the government has intervened, and in so doing we are making a commitment to complete the vessels and safeguard the jobs and to give the yard a future."

The Programme Review Board is being chaired by Michelle Rennie, director of major projects with Transport Scotland, and also includes representatives from CMAL, Caledonian MacBrayne, Scottish Enterprise, Marine Scotland, GMB Scotland and the Scottish Government. The Turnaround Director is Tim Hair, a qualified marine engineer who is said to have a "track record of stabilising companies in difficult situations" after working across a range of sectors including oil and gas, manufacturing, aerospace and the car industry.

READ MORE: SNP defends Caledonian MacBrayne NI payments to 1,000 seafaring staff
Earlier, speaking ahead of the meeting Mr Mackay had said: “On Friday I met with the excellent workforce and stressed the Scottish Government’s commitment to achieving the best possible outcome for the yard.

“Alongside the newly-appointed turnaround director who will take forward steps to stabilise the business and support the recruitment of an incoming management team, including a Chief Executive Officer, I have formed a Programme Review Board to establish a new delivery programme to ensure the completion of the CMAL ferry contracts at the lowest possible cost to the taxpayer.

“While work continues at the yard, we are working to put in place a management team which will refocus all efforts on completing this vital government contract. We are working closely with staff and the trades unions – as well as suppliers and customers - to achieve the best possible outcome for the yard.”

“Public control will provide much-needed continuity of employment now and ensure the completion of the CMAL ferry contracts at the lowest possible cost to the taxpayer. It is absolutely essential that the outstanding contracts to build these two ferries are completed in order to sustain the Clyde and Hebrides Ferry Services network and provide vital support for the economies of our island communities."

GMB Scotland Organiser and CSEU Scotland Chair, Gary Cook, has welcomed the nationalisation of the yard to secure its immediate future, adding: “Our members were caught in the middle of a situation that had nothing to do with them and their relief will be palpable. It is five years since the yard went bust and the Scottish Government has prevented that from happening again.

“We can now look to the future and everyone should do so with a sense of purpose. With vision and competency we can get on with building the ships Scotland needs and together we can grow jobs and prosperity on the lower Clyde.”