ECONOMY Secretary Neil Gray has issued a rare ministerial direction authorising further spending on a delayed CalMac ferry.
In an update to the Scottish Parliament, Gray told MSPs that it was “extremely disappointing” that costs to complete Hull 802 had increased.
Gray said that while the MV Glen Sannox (801), also still under construction, met the case for “value for money” and would be cheaper to complete at Ferguson Marine’s yard in Port Glasgow, Hull 802 was a “more challenging” issue.
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The Cabinet Secretary said that if the Scottish Government had to procure a new vessel to replace Hull 802, then it would result in “significant further delays” to delivering a ferry for island communities. He also warned that it would put the future of Ferguson's yard, and the jobs it supports, in “jeopardy”.
In fact, it would not be until at least May 2027, two and a half years on from the current timetable and expected delivery date, if ministers decided to re-procure the contract to find a cheaper alternative, Gray said.
“Officials have advised me that as a consequence of that due diligence that the regulatory and propriety of completing vessels 801 and 802 under the existing contracts is met,” the Wellbeing Economy Secretary (below) told MSPs.
“I can also confirm that with respect to vessel 801 the value for money case for completing that vessel is also met. The cheapest option open to ministers is to complete 801 at Fergusons.
“However the case for vessel 802 is more challenging and I have accepted the judgment of the Scottish Government Accountable Officer that the narrow value for money case has not been made.”
Gray said that the issue is not one that can be considered purely on a “value for money” basis as there are “matters of the utmost importance”.
“From the very start, we have been clear that our island communities deserve to be supported by two new, energy efficient vessels with the capacity and reliability required to support vibrant island economies,” Gray said.
“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.
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“A new vessel could not be deployed until at least May 2027 at the earliest – four years from now, and two and half years from the current delivery timescale.
“I do not consider that is acceptable to ask our island communities to wait this further period.”
Gray said that if Hull 802 wasn’t completed at Ferguson’s then the “very future of the yard” would be in jeopardy.
“On the basis of the cost projections in our due diligence, I have therefore provided written authority to the accountable officer, to secure the continued build of vessel 802 at Fergusons,” Gray added.
“In the light of this decision I can also confirm the preliminary budget set out by the then Deputy First Minister for Ferguson Marine for 2023-24 to support the continued completion of vessels 801 and 802 and I have advised the CEO of this position.
“Our due diligence work has identified a number of inflationary and other significant pressures that could increase the cost to complete.
“As part of our ongoing control and scrutiny, the chief executive will undertake a detailed review on remaining costs in the light of this due diligence and will update Parliament in due course.”
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Ferguson Marine bosses have been asked to improve productivity, maximise efficiency and ensure tight control of costs, while delivering the vessels as quickly as possible, Gray added.
The shipyard will also be expected to provide detailed scrutiny of any forecast costs, expenditure, and monthly progress.
“In the meantime, I also reluctantly accept the revised delivery dates set out by the Fergusons CEO on 16 March of autumn this year for vessel 801 and late summer 2024 of 802,” Gray added.
Willie Rennie, LibDem MSP, accused transport minister Kevin Stewart of leaving the chamber in the middle of Gray's statement.
“But who cares? In for a penny, in for a million pounds," Rennie said.
“We’ve had eight years of this utter fiasco in which the government has soaked the taxpayer, has betrayed the islanders and has utterly humiliated the workers.
“Yet, we’ve had six ministers in that time. Not a single one of them, including the current First Minister, has lost their job for this fiasco.
“Will anyone ever face the music for this disaster?”
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