Ferguson Marine ferries for CalMac delayed yet again and now three times over budget

Yet more delays to two CalMac ferries that could see them completed up to another three months late and cost three times over budget have been revealed by builder Ferguson Marine.

Shipyard chief executive David Tydeman told MSPs in a letter on Wednesday that the two ferries, which are five years late, would cost up to £209.6 million to complete compared to the previous estimate of up to £122m.

That would mean a total cost of around £300m, including some £83m previously spent, compared to the original contract of £97m.

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A damning report into the fiasco by public spending watchdogs Audit Scotland in March had estimated the final cost would be at least £240m.

Glen Sannox is not due to be completed until next year. Picture: Cmal/Robert Perry
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Mr Tydeman said the second ferry, known as hull 802, is not now expected to be handed over until the first quarter of 2024 compared to the previously scheduled timescale of between October and December 2023.

It is being built at the Port Glasgow yard for the Skye-Harris-North Uist triangle route.

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Mr Tydeman also said in the update to the Scottish Parliament’s net zero, energy and transport committee that there was a “one to two month worst case slippage in final handover” of Glen Sannox, or 801 – the first vessel.

Mr Tydeman said the diversion of resources from 802 to Glen Sannox because of extra work required on the latter ferry had meant “structural completion” of 802 had moved from September to late November 2022.

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Completion of Glen Sannox is running five years late. Picture: Cmal

He said “practical completion” was now forecast for the end of December 2023, which would delay its final dry docking to early 2024, with “associated trials and handover now planned for Q1 [January-March] 2024”.

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Mr Tydeman said: “Whilst this move of the handover date for 802 from Q4 [October-December] 2023 into Q1 2024 is disappointing, we believe that our up-front efforts on much more robust planning of 802 and learning from 801 can present this change of dates as a positive, more professional approach, for a realistic and deliverable handover in time for the summer season 2024.”

He said construction of the ferry had been changed because of multiple problems with the way Glen Sannox had been built, including after the yard was taken over by the Scottish Government in 2019 following its collapse under the ownership of businessman Jim McColl.

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He listed these as deficiencies in work planning, gaps in supplier information, inadequate rigour in stock control and material handling, gaps in design data and a “considerable amount of re-work through errors made as the business recovered from administration and mobilised through the pandemic”.

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CalMac may be forced to cut sailings to keep its ageing fleet operating
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Glen Sannox, ordered for the main Arran route, is due to be finished between March and May next year, and Mr Tydeman said “the target remains for completion in April”.

However, he warned of the possible two-month slippage because of the “complexity of the on-board ship management systems” and the “first-of-class aspect of commissioning the liquified natural gas system (LNG)”.

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He said there was an option for the ferry to initially run on single fuel [diesel], with LNG commissioning postponed to winter 2023.

Mr Tydeman said Glen Sannox would now cost up to £101m to complete and 802’s completion would cost up to £108.6m.

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A spokesperson for the shipyard said the £209.6m total compared to £119-122m estimated in a previous update to MSPs in March.

However, Mr Tydeman said potential savings and a contract with shipbuilders BAe could reduce the total by around £17m.

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Edward Mountain, the committee’s convener, speaking as a Highlands and Islands MSP, said: “This latest update from Ferguson Marine confirms my suspicions that the delivery of vessel 802 is still impacted by problems and delays.

“These are not the fault of the new management of the yard though.

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"I support the progress David Tydeman is making and he is not to blame for the delayed delivery of 802, the Scottish Government is.

“They presided over the catastrophic failures which led to the nationalisation of the yard and the significant errors which continued under [former yard turnaround director] Tim Hair’s management.”

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The revelations came as First Minister Nicola Sturgeon said she has not seen any evidence of criminality in the procurement and construction of the ferries, but insisted coming to that conclusion was "not my job".

It follows allegations by BBC Scotland on Tuesday that Ferguson Marine had sight of a more than 400-page report setting out the technical requirements for the vessels before it was awarded the contract.

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According to the BBC, it was given to the yard by a design consultant, something that McColl said would have put them in a "very strong position" to win the contract over the five other bidders.

Large parts of the document had been copied verbatim into the Ferguson Marine bid, the BBC said.

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Scottish Government-owned ferry owner Caledonian Maritime Assets Limited, which placed the order, rejected claims there had been "preferential treatment" offered to Ferguson Marine given the body's board voiced its strong opposition to the yard being awarded the contract over the lack of a builder's refund guarantee.

Auditor General Stephen Boyle announced on Wednesday he would look into the procurement process, with the full support of Scotland's top civil servant, John Paul Marks.

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But Scottish Conservatives transport spokesperson, Graham Simpson questioned whether it was time to call in the police.

Public audit committee convener Richard Leonard, questioning Sturgeon at the Conveners' Group in the Scottish Parliament, asked if she believed there was criminality in the process.

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She said: "I've got many responsibilities as First Minister - I take each and every one of them very seriously - but I don't think anybody would say that I should be the arbiter on this or any issue whether there has been criminality.

"I've certainly seen no evidence of that, but it is not my job.

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"We have independent authorities that are there to determine these issues on whatever topic it is that we're speaking about."

The First Minister has been called to appear before the public audit committee, which is conducting an inquiry into the issue, in the coming weeks.

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Meantime, Simpson told a ferries debate at Holyrood on Wednesday that "insider dealing" over the contract "goes all the way to the top".

He said: "Make no mistake, the SNP's handling of this is the scandal."

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