The Ferguson shipyard has a contract with a state-owned enterprise to build two ferries ©  Jeff J Mitchell / Getty Images
The Ferguson shipyard has a contract with a state-owned enterprise to build two ferries © Jeff J Mitchell / Getty Images

Scottish Government set to take over shipyard

The Scottish Government has entered into a management agreement to operate the Ferguson shipyard.

Ministers will operate the yard under an agreement with administrators, Deloitte. The Scottish Government will buy the facility in four weeks' time unless a private buyer is found. 

Ferguson shipyard, based in Port Glasgow, announced it had entered into administration earlier this month.

The shipyard is building two ferries for Caledonian Maritime Assets Ltd (CMAL) ferries, a state-owned enterprise, in a £97m contract with the Scottish Government.

Owner of Ferguson, Jim McColl, accused CMAL of failing to pay for costly design changes to the ferries which were not covered by the contract.

He said the additional work would cost a further £61m and offered to pay for £40m. However, a government review agreed with CMAL that the changes were included in the contract.

The takeover by the government will enable completion of the two ferries, as well as other vessels which are currently under construction.

Deloitte said the ferry contract is "materially behind schedule and over budget".

Economy secretary Derek Mackay told employees at the shipyard on Friday that the government could not “stand aside” while the company went into administration “resulting in the jobs being lost and the vessels not being completed”.

He said: “It is absolutely essential that the outstanding contracts to build these two ferries are completed in order to sustain the Clyde and Hebrides Ferry Services network and provide vital support for the economies of our island communities.

“We are now working to put in place a management team which will refocus all efforts on completing this vital government contract. We will also be working closely with staff and the trades unions – as well as suppliers and customers – to achieve the best possible outcome for the yard.”

Public control of the yard would “ensure the completion of the ferry contracts at the lowest possible cost to the taxpayer”, he added. 

A programme board has since been established to secure an effective delivery programme for the ferries. 

Unite Scottish secretary, Pat Rafferty, said: “It’s clear at this stage that nationalisation was the only serious option on the table to save the yard and more than 350 highly skilled jobs. The Scottish Government have rightly acknowledged their obligations to the workforce, and the people the ferries would serve which must be acknowledged. 

“Unite also welcomes the fact that the trade unions have been fully engaged in this process so far. This must remain the case going forward to ensure that the ferries on the existing contract become operable and future contracts can be secured. The yard can have a very successful future and we must all now play our part to make sure this happens.”

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