THE Scottish Government is effectively to nationalise the last commercial shipyard on the Clyde after it was driven to the brink of collapse by a disastrous £97m ferry contract.

Finance Secretary Derek Mackay talked to workers at Ferguson Marine Engineering in Port Glasgow this morning about the plans.

Earlier this week he said the government was "ready and willing" to take the yard into public ownership.

The yard's owners accused the government of ousting them in a "behind the scenes" deal.

The Scottish Tories called for a full parliamentary inquiry into the "national embarrassment". 

Administrators Deloitte have been appointed to take over the yard initially before it is leased to the government in the absence of any commercial interest.

There will a clear-out of the existing management.

A new "turn-around director" has been appointed to stabilise the business and help recruitment a new management team, including a Chief Executive Officer.

Former BAE Systems boss Vic Emery has been tipped for the CEO job.

The Government said it would operate the yard under a "management agreement" with the administrators while it was put for sale for around a month.

If, as expected, no buyer is found, the government will acquire Ferguson Marine itself.

It said it would develop a “revised cost analysis” to help complete the two ferries, then “conduct further work to identify a viable future structure for the yard”.

Around 300 staff and 60 agency jobs had been at risk after Jim McColl's Clyde Blowers Capital (CBC) took the first steps towards administration last Friday.

The firm bought Ferguson's out of administration five years ago then landed a £97m contract to build two dual-fuel ferries for CalMac.

However the deal rapidly soured, with runaway costs, design changes and a two-year delay.

The government has already loaned Ferguson's £45m to stay afloat.

READ MORE: Scots face paying out millions to nationalise shipyard

CBC made it plain it had not agreed to the administration or public ownership move.

In a statement, it said: "We are aware that an administrator has been appointed today.

"The Scottish Government have not involved CBC or the directors of Ferguson Marine in any of the discussions leading up to this appointment.

"We are unaware of the deal that the Scottish Government have made behind the scenes and, as a result, are unable to provide any further comment at this stage." 

The First Minister said it was the "only option" to save jobs and the ferry contract.

Mr Mackay said the new arrangement with the administrators would enable the ferries to be completed and secure a future for the yard through continuity of employment.

It follows two years of failed discussions to find a commercial solution.

He said: “We have always been clear that we want to complete the vessels, secure jobs and give the yard a future. I am here today to ensure that we hit the ground running in making that happen and to reassure Ferguson’s excellent staff of the government’s commitment.

“Public control will provide much-needed continuity of employment now and ensure the completion of the ferry contracts at the lowest possible cost to the taxpayer.

"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.

“The alternative was for the government to stand aside while the company went into administration, resulting in the jobs being lost and the vessels not being completed. That was not an outcome I was willing to consider.

“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.”

The government now faces a possible Scottish Parliament inquiry into how the ferry contract went awry and questions over how much taxpayers could end up paying.

It also emerged today that a £19m  Scottish Government loan to Fife engineering firm BiFab whicht was converted into shares was now worth just £6m.

Scottish LibDem leader Willie Rennie said: "Some serious mistakes have been made which have resulted in delayed ferries for west coast communities and the jobs of hundreds of workers put at risk. 

"Today is not the day to apportion blame and urgent lessons must be learnt.  

"Now that Ferguson Shipyard is heading into government hands it is imperative that they set out a clear plan which should include a change of the leadership team at the yard."

The GMB Union cautiously welcomed the government's intervention.

GMB Scotland Organiser and CSEU Scotland Chair, Gary Cook, said: “Nationalisation secures the immediate future of the yard and that is a very welcome development, particularly after all the recent uncertainty.

"Our members were caught in the middle of a situation that had nothing to do with them and their relief will be palpable. It is five years since the yard went bust and the Scottish Government has prevented that from happening again.

“We must be clear that nationalisation will not be a quick-fix and there will be challenges. There will for example be limits to the amount of private sector work for which the yard can compete but the alternative to nationalisation was closure and that was no choice at all.

“Our immediate priority is to secure the re-employment of the workers released last weekend because their skills are essential and then we will insist the government works with us to develop a proper industrial plan for the yard because lessons must be learned.

“We can now look to the future and everyone should do so with a sense of purpose. With vision and competency we can get on with building the ships Scotland needs and together we can grow jobs and prosperity on the lower Clyde.”

READ MORE: Letters: Ferguson Marine drama is yet another example of Scotland’s total lack of industrial strategy

Tory MSP Jamie Greene said: "The SNP Government’s decision to barge in and use ministerial powers to take over the yard simply covers up the true extent of how much they have messed up this bungled ferry contract.

“We all want to save the yard, save jobs and see these new ferries completed.

“But Derek Mackay has not explored all of the options available, and he has refused to compromise with the shipbuilders over the disputed costs.

“It’s clear that  SNP have no clue how much it will now cost the taxpayer to run the yard, whether they can complete the ferries, and no idea what effect state ownership will have on the yard’s ability to secure other contracts.

“This whole fiasco is a national embarrassment and a full parliamentary enquiry is the only we will get to the bottom of this mess.”

Chris McEleny, leader of the SNP opposition on Inverclyde Council, who had opposed nationalisation, said: "This is an immediate relief for the community and the workers at the yard. A priority must be to now re-engage the agency staff who have been out of work due to the uncertainty. 

"This however is a bitter sweet announcement. The level of investment by Clyde Blowers Capital helped completely transform the yard, putting it in good stead to grow by another 500 workers over the next 18 months. These are vital growth plans that I hope the Scottish Government can follow through on. 

"I would call on the Scottish Government to publish a 25 year plan for the renewal of the 60 vessels in public ownership, work that must be the foundations of the long term security and growth of Ferguson’s.

"Inverclyde has been crying out for inward investment therefore its bitterly disappointing that we have lost the business leadership skills and economic input of Clyde Blowers and Jim McColl." 

Unite Scottish Secretary Pat Rafferty added: “Unite fully supports the actions of the Scottish Government to intervene and nationalise Ferguson Marine shipyards.

"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.”

Ferguson Marine had been at the centre of an increasingly bitter row between ministers and Mr McColl, who sits on Nicola Sturgeon’s Council of Economic Advisers. 

He had blamed CalMac’s state-owned parent company Caledonian Maritime Assets Ltd (CMAL), which is behind the CalMac order, for design changes and rising costs.

However CMAL insist Ferguson Marine took on the work knowing it was challenging.

Mr McColl suggested the government absorb the cost of half the £90m overrun in return for an equity stake, but Mr Mackay refused on the grounds it could breach EU state aid rules.

Mr Mackay said on Monday that the government would not “hand over a cheque” to complete the ferries because it would be "illegal" .

Mr McColl’s frustration boiled over at the weekend when he accused ministers of “abusing their power” and failing to understand basic economics.

READ MORE: SNP ministers 'abusing their power' over ferry contract, says Sturgeon adviser

He said: “We get soundbites from ministers, tweeting about finishing the ferries and saving the jobs in the yard. It’s all PR. There’s no economic sense behind what they’re doing.”

“The way they are acting right now is economically damaging for the local area and for Scotland. Anybody with a Standard grade in economics would be able to work this out , it’s not rocket science…. The Government should not be abusing their power like this.”

He and local politicians have opposed nationalisation in case it leads to the yard's stagnation.

The Turnaround Director will be Tim Hair, a qualified Marine Engineer and a member of the Institute of Marine Engineering Science & Technology.