ECONOMY secretary Neil Gray has ruled out a request for millions to support the shipyard at the centre of the long-running ferries saga – but pledged a “commitment” to finding a way forward for the future of Ferguson Marine.

Giving an update on the progress of building of two new CalMac ferries, the SNP minister told MSPs that a request for funding submitted by the yard did not meet a key legal requirement of subsidy control regulations.

He also said the case for investment was contingent on winning a specific type of work – but market conditions had changed and Ferguson Marine (Port Glasgow) (FMPG) board and management have now concluded it should “not be pursued at this time”.

The shipyard in Inverclyde was taken into public ownership four years ago, after its financial collapse following long delays and mounting costs over the delivery of two ferries, the Glen Sannox and Glen Rosa.

Ministers have previously said they hope to make it sustainable before returning it to the private sector.

Gray told MSPs: “In considering the next steps for FMPG after delivery of Glen Rosa we have been very clear that our priorities are to preserve the skilled jobs and secure a sustainable future for the shipyard.

“Earlier this year we received a business plan and accompanying request for investment from the yard and we are currently working with them to refine those plans and try to put together a proposal that will provide the kind of future we all want to see.

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“Any such request must meet subsidy control rules…and needs to demonstrate value for money and be open to parliamentary scrutiny.

“Our independent due diligence on the initial capital request concluded with the initial business case would not meet the commercial market operator test, a key legal requirement if we are to demonstrate compliance with the subsidy control regime and therefore we continue to examine options that would be compliant.”

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He added: “At the same time, the markets in which Ferguson Marine operate continue to change and indeed a key component of the initial case for investment was contingent on a specific type of work winning a specific pipeline of work that FMPG board and management have recently concluded should not be pursued at this time.

“Both the yard and ourselves recognise that it is vital that any investments supports a business plan that reflects evolving circumstances, is genuinely deliverable and meets our legal requirements in subsidy control.”

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Gray (above) went on to say the government would “leave no stone unturned” in finding a way forward and said all options for securing a “future based on a promising order book” would be considered.

He added: “I understand this may be unsettling for the workforce, but it is important we get this right and I hope that I am leaving no-one in any doubt about this Government’s commitment to retaining shipbuilding on the Clyde and providing future opportunities for the new and indeed future workforce in the local community.”

In response Scottish Conservative transport spokesman Graham Simpson said: "Many would have been hoping for some good news about the future of the yard today, workers will be watching this and feeling a sense of despair.

"A cross-party group of MSPs wrote to the Cabinet Secretary on September 7 saying that investment in a new plating line was essential if the yard is to become competitive."

Simpson said David Tydeman, CEO of Ferguson Marine, had asked for "tens of millions" of pounds of investment.

"He has been clear that a decision is time critical," he added.

"Today the cabinet secretary is saying that he cannot proceed. He talks about securing a future based on a promising order book.

"There will be no such order book without that investment.”

Gray responded there was progress being made, including Maritime and Coastguard Agency (MCA) approval of design changes allowing Glen Sannox and Glen Rosa to proceed. 

He added: "The request for funding is still undergoing development, so any investment provided to Ferguson Marine has to comply with regulatory propriety and value for money assessments as well as subsidy control legislation and we are continuing to work with the yard on having that finalised application coming forward."