The cost of the second massively-delayed CalMac ferry being built at Ferguson Marine has increased by so much it would be better value for money to build a new one, the Scottish Government has revealed.
But wellbeing economy, fair work and energy secretary Neil Gray said any new ferry would take at least four years to complete, which would be unacceptable because of the impact of the delay on islanders.
He said the partly-built ferry, hull 802, would instead be completed at the yard in Port Glasgow as planned, where its latest delivery date of late summer next year remains unchanged.
Mr Gray said the first ferry, Glen Sannox, or hull 801, had met the value-for-money test and was also still due to be completed by its current date of autumn this year.
CalMac said the ferry was due to be deployed on the main Arran route between Ardrossan and Brodick following eight weeks of trials after delivery.
Hill 802, which is still largely covered by scaffolding, is due to be named and launched down the slipway at Ferguson Marine in late November. Deployment options include operating on the same route as Glen Sannox in the peak summer season.
It was originally due to operate the triangular route between Skye, Harris and North Uist, but this is now to be serviced by two of four new CalMac ferries being built in Turkey.
The Ferguson Marine ferries, which will run run on diesel and liquefied natural gas, should both have been completed in 2018 and are expected to cost a total of more than £300 million – more than three times the original £97m contract.
The order was won in 2015 by previous yard owner Jim McColl before it went into administration and was nationalised in 2019.
Mr Gray told MSPs the case for 802 was “more challenging" than 801. He said: “I have accepted the judgement of the Scottish Government accountable officer that the narrow value-for-money case has not been made.
“Having said that, in making a decision around the way forward, I am guided by a wider set of considerations relating to the original policy objectives and the impact that any decision might have on people, communities and national resilience. It is also important that I consider the impact on Ferguson Marine as well.
“These are not matters that can be taken into account in a pure value-for-money exercise, but clearly they are matters of the utmost importance.
“While I accept that the pure value for money assessment concludes that it could be cheaper to re-procure a new vessel, this work also shows that doing so would result in significant further delays.
“A new vessel could not be deployed until at least May 2027 at the earliest – four years from now, and two-and-a-half years from the current delivery timescale. I do not consider that is acceptable to ask our island communities to wait this further period.
"I remain committed to supporting a sustainable future for Ferguson. I believe that confirming our intention to deliver vessel 802 at the yard provides a platform upon which future success can be built.
“Put simply, if vessel 802 was not delivered at Ferguson’s then the very future of the yard, and the hundreds of jobs it supports, would be in jeopardy.”
Scottish Conservatives transport spokesperson Graham Simpson said: “What an utter, abject humiliation for the Cabinet secretary to have to admit to Parliament and the nation that – years down the line – it would be cheaper to start from scratch, than complete vessel 802.
“Of course, that can’t and won’t happen – because our island communities have already been kept waiting years too long, and any further delays to the delivery of the jinxed Ferguson Marine vessels would heap betrayal upon betrayal. But it’s a shameful, scarcely-believable indictment of SNP mismanagement that completing 802 at Ferguson does not represent value for money.
“The building of ferries 801 and 802 is a national scandal that continues to snowball before our eyes. The very least islanders – and Scottish taxpayers – deserve is an admission from the Cabinet secretary of what the final bill for 801 will be, and, in the case of 802, how much cheaper it would be to buy a new ferry elsewhere, compared to finishing the one languishing in Port Glasgow.”
Scottish Labour transport spokesperson Alex Rowley said: “A string of SNP ministers have come and gone, but not one has ever been held accountable for this mess. At the heart of this scandal are island communities, shipyard workers and taxpayers being badly failed.
“Securing the yard and delivering these ferries is essential, but that is the bare minimum the Government needs to do. The SNP must deliver these ferries without any more delays or overruns, and set out a real long-term plan to protect the future of the yard.”
Ferguson Marine (Port Glasgow) chief executive David Tydeman said: “Today’s announcement means we can push ahead with the delivery of the dual fuel vessels this year and next. I also acknowledge the Cabinet secretary’s commitment to supporting the yard to drive further improvements that will enable us to pursue further commercial contracts.”