SCOTTISH ministers have been accused of acting like “a banana republic” and deterring overseas investment by taking over the last civilian shipyard on the Clyde.
One of North America’s largest shipbuilders said public control of Ferguson Marine in Port Glasgow was “insanity” and “a slow motion car-crash” for workers and taxpayers.
The owners of Canada’s Davie yard said the “very short-sighted” decision could make it harder to find a buyer for Ferguson’s and deter investment in Scotland more generally.
READ MORE: Our yard wasn’t nationalised and we beame a success
They also said that if ministers thought Ferguson’s would get work on UK defence orders, such as the new Type 31e frigate, as a nationalised yard “they are smoking crack”.
Finance Secretary Derek Mackay took Ferguson’s into public control last month after it was driven into insolvency by a £97m contract for two CalMac ferries.
He said the move would safeguard 350 jobs and ensure completion of the ferries, which are substantially over-budget and behind schedule.
If no commercial buyer is found within a fortnight, the yard will be nationalised.
Around 20 expressions of interest have been received, with the asking price around £60m.
Jim McColl, whose Clyde Blowers empire bought Ferguson’s in 2014, has blamed CalMac’s public sector owner, Caledonian Maritime Assets Ltd (CMAL), for the situation.
He said repeated design changes on the innovative dual-fuel boats led to delays and rising costs, while CMAL insisted it would not pay above its “fixed price” contract.
Mr McColl offered the Government a stake in the yard if they absorbed half the overrun, but Mr Mackay refused, saying it would breach EU state aid rules.
The Davie owners said a public sector contract for the same kind of ferries at their yard had uncanny parallels with CMAL and Ferguson’s.
READ MORE: Still proud: The ‘dirty wee port’ determined to save its shipyard
However, in Canada, an independent expert was used to assess and apportion costs, resolving the dispute and allowing the boats to be delivered.
The Davie owners said the Scottish Government should have done the same, and taken a long view rather than nationalise Ferguson’s over its inaugural order under Mr McColl.
Alex Vicefield, chair of CEO of the Inocea Group which owns Davie, said: “I don’t know anyone in their right mind who would think that nationalising a shipyard in 2019 in the western world is a good idea.
“If a successful entrepreneur like Mr McColl can’t do it, I can assure you a government won’t be able to do it. You only see government owned shipyards in banana republics.
“It sets a pretty dangerous precedent. If I was a foreign company looking at investing in Scotland and doing business with the Scottish Government, I’d be pretty scared that my company’s going to get appropriated like it would do in any other banana republic.”
James Davies, CEO and president of Davie, said: “To finish these ships [at Ferguson’s] you need somebody who’s capable of leading a high quality team to finish a very difficult project. What you don’t do is nationalise a shipyard and throw money at it.
“To alienate McColl and those guys, it guarantees that that shipyard will ultimately falter.
“What signal does it send to private capital? You put your $30m into this business and then ‘Oh sorry, it’s not gone completely to plan and we’re going to nationalise it.’ Good one.”
Scottish LibDem leader Willie Rennie said: “The case for an inquiry into events at Ferguson is compelling. The fact a similar project was handled in such a different way in Canada shows there are big questions to answer about the Scottish Government’s approach. We need to understand if investors are being deterred because of the fear of nationalisation.”
Tory MSP Jamie Greene MSP said: “No one in their right mind thinks nationalisation is the answer to the Ferguson fiasco, and this damning indictment re-enforces that.
“If SNP ministers think civil servants will run the yard better than a team of commercial shipbuilders then frankly they’re wired to the moon. This madness must be stopped before the SNP welds the final rivet into the coffin of Scottish ship-building.”
A Government spokesperson said: “This action was about securing jobs and giving the yard a future - the alternative was to stand aside while the company went into administration.
“Suggestions we could simply have followed the steps taken in Canada, or other countries with vastly different rules and regulations on state aid, are ignorant and ill-informed.”
A CMAL spokesperson said: “The comments made by Davie shipyard are inaccurate, uninformed and demonstrate they have no knowledge of the situation.
“We have always acted in line with our contractual obligations.”
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