Scottish Government ferry firm would 'absolutely' entrust Ferguson Marine to build more ships

The Scottish Government’s ferry-buying firm said it would “absolutely” entrust Ferguson Marine to build more ferries as it revealed it had agreed with the completion dates of two hugely-delayed vessels at the shipyard for the first time.

Caledonian Maritime Assets Limited (Cmal) chief executive Kevin Hobbs told The Scotsman the Port Glasgow yard was “on an upward curve”, describing it as “an awful lot better than it was and going in the right direction”.

He said his confidence had grown since its new chief executive David Tydeman took over in February, leading to Cmal concurring with the delivery dates for Glen Sannox, or hull 801, and unnamed sister ferry 802, for the first time since the ill-fated contract was placed in 2015.

Glen Sannox, earmarked for the main Arran route, is now due to be finished between March and May 2023, and 802, for the Skye-Harris-North Uist triangle, between October and December 2023 – five years late.

Glen Sannox under construction at Ferguson Marine in Port Glasgow last month. Picture: The Scotsman

Mr Hobbs said Mr Tydeman's predecessor, turn-around director Tim Hair, had announced the first vessel could be completed eight months earlier, which he described as “absolutely unachievable”.

He said he would be happy to place orders for CalMac’s next seven small ferries at Fergusons, pointing to its success in building similar size vessels for the west coast ferry operator over the past decade.

He said: "Would we entrust small vessels to be built at that yard? Absolutely we would.

"But we have to have confidence that they’re not diverting attention to other projects.

The unnamed second ferry, hull 802, taking shape at Ferguson Marine in Port Glasgow in May. Picture: The Scotsman

"Fundamentally, I haven’t got a problem building ships there, but please get one, if not both, finished before we can entrust you with the next phase.”

Mr Hobbs said the world’s first three diesel electric hybrid ferries, built by Fergusons for CalMac between 2010 and 2014, had proved to be “absolutely excellent” and had performed “exceptionally well”.

He pointed out while smaller than the novel dual-fuel diesel/liquefied natural gas-powered 801 and 802, they had also been also technically challenging.

The chief executive also insisted the yard hadn’t lost the skills needed to build more ferries.

Caledonian Maritime Assets Limited chief executive Kevin Hobbs said he had increasing confidence in Ferguson Marine. Picture: Susie Low

He said: “There’s a remarkable number of people still there who were involved [in the hybrid ferries project].

"They might have been laid off at a certain point in time, but the core workforce is there.

"We wouldn’t have any problems having small vessels built there.”

Mr Hobbs was more cautious about further larger ferries being built at the yard, but said it would be capable of such contracts, so this remained a “possibility”.

First Minister Nicola Sturgeon at the launch of Glen Sannox in November 2017. Picture: Mark F Gibson / Gibson Digital

While CalMac's next two large ferries, for Islay, are being built in Turkey, Cmal is expected to place an order for a replacement for the 33-year-old Lord of the Isles, which serves the Mallaig-Lochboisdale route, in 2024.

Over whether Fergusons could be a contender for that contract, Mr Hobbs said: "We’d have to look at how they had done on these [801 and 802] and what capacity they might have, so we’ll have to wait and see.

"The problem that we had is that [in] the most recent order we placed in Scotland, we’ve been let down very badly.”

The Scottish Government nationalised the yard in 2019 after it collapsed into administration, but Mr Hobbs did not anticipate pressure from ministers to place future orders there.

He said: “I would suggest they listen to us. As the procuring authority, we can’t choose a favourite shipyard.”

But he added: "The ultimate sanction the Government has got is they don’t give us the money to build something.”

On the completion of the delayed ferries, which could end up two-and-a-half times over budget at £240 million, Mr Hobbs said: "There is not much now which is standing in the way of both of them being delivered.

"There are a lot of detractors out there saying rather spurious things about them, but we’ve always had a view that both would be finished.”

But he revealed: “We didn’t agree with the optimism of either Ferguson Marine Engineering Limited prior to administration or, dare I say it, Ferguson Marine Port Glasgow [the nationalised yard], and the turn-around director [Tim Hair].

"David Tydeman has come with a completely different approach.

"We sat down and had an honest discussion about our difficulties in believing the dates and we are not perfectly aligned, but relatively aligned.

"That resulted in a further slippage [announced by finance secretary Kate Forbes in March] because we felt that the [801 completion] date of August 2022, which was the previous turn-around director’s view of life, was absolutely unachievable.

"The dates which we’ve got at the moment, give or take a month, are absolutely achievable, barring another pandemic or whatever.”

But he also warned: “It’s fair to say something might come out of the woodwork and go wrong”, referring to past unexpected problems such as cabling.

Mr Hobbs said despite the turmoil at the yard, its only skills shortage had been among steel workers, but recruits had come from Romania.

He also said delays to the construction of ferry 802 had meant fewer wrongly-constructed components having to be stripped out.

Mr Hobbs said: "A vessel that’s less progressed in a negative way is a positive.”

He said 802 was now “beginning to shape and come on well”, with the the bow section lifted into place last month.

"Certainly, 801 has been more challenging, and mainly because it was launched in advance of when it should have been,” he said.

"We were begging the shipyard not to launch it in November 2017 [in a ceremony performed by First Minister Nicola Sturgeon] when it should have been kept on the slipway at least another six months."

He said that had added to costs, such as the larger cranes needed to reach out over the floating vessel.

"The whole process of shipbuilding normally is that you do everything you possibly can when it’s not floating,” he said.

Mr Hobbs spoke in 2020 of the huge toll the fiasco had had on Cmal, which had set back the process of replacing CalMac’s ageing fleet.

He said: “We should have been well on with building more ships at this stage, but the resource involved in sorting out the problems which we’ve been subjected to has been, to be frank, enormous and crushing in many respects.”

But 18 months on, he said: “Forgot the fact that we are upset about it, we are not half as upset as people that live on an island.”

Scottish Labour transport correspondent Colin Smyth said: “The skills and experience of the workforce at Ferguson have never been in doubt, only the utter incompetence of Scottish Government ministers and management at the yard over the handling of the ferry fiasco.

"If we are to secure the long-term future of shipbuilding in Scotland, we cannot have a repeat of this expensive farce, which has meant the Glen Sannox and 801 are years late and massively over budget, letting down the taxpayer and island communities so desperate for these ferries.”

Scottish Conservatives transport spokesperson Graham Simpson said: “I think the future of the yard lies in building smaller vessels, be that for Cmal or anyone else.

"I am sure it has a positive future, but it probably isn’t going to be in building larger vessels – that’s pretty clear.

“Ultimately, there needs to be a pipeline of work, but that means the SNP are going to have to decide how they want to run and procure ferries, a decision like others that they are avoiding.”