THE SCOTTISH Government has expressed disappointment at the Canadian owners of troubled Burntisland Fabrications at a "lack of investment" while ministers pumped in over £37.4m.
A probe is being called for into ministers' handling of the part state-owned BiFab seen as a key part of the future of Scotland's wind farm revolution which is close to collapse after they withdrew support for a major wind turbine contract.
The Herald on Sunday revealed that while the Scottish Government injected over £37.4m in loans to support struggling BiFab and for that gained a third of the firm, the Canadian firm JV Driver took total control for just £1.
BiFab, which once employed around 1,400 workers was rescued from the brink of administration when it was purchased by the Canadians, although hundreds of jobs were subequently shed. Just 30 staff remain.
Economy secretary Fiona Hyslop told the Scottish Parliament that it is not that the Scottish Government does not want to support BiFab, it is that "we can't".
But she added: "We will leave no stone unturned. We will explore all options."
It comes as a top QC claimed the Scottish Government could face a judicial review over ministers' decision to refuse to continue to back BiFab which is now believed to be on the brink of financial collapse.
The Herald on Sunday revealed that ministers stand to lose up to £54.2m of taxpayers money which it has pumped into the firm - seen as a key part of the future of Scotland's wind farm revolution - if it collapses.
Ministers' support came by way of a commitment to effectively underwrite a contract to have a part in the the £2 billion Neart Na Gaoithe (NnG) offshore wind farm project in the Firth of Forth to the tune of £30m
But they decided to do a U-turn after its new legal advice felt that providing key support for the ailing company at the centre of a wind farm jobs row would be seen as illegal state aid under European Union regulations.
Scottish Government sources revealed that a re-evaluation came after BiFab in September failed to win any work on Scotland’s largest offshore wind farm, the multi-billion pound SSE-run Seagreen project, located just a few miles from its yards in Burntisland and Methil in Fife.
Ms Hyslop said: "This government has shown real commitment to BiFab and we continue to explore all options to secure a future for the NnG contract in Scotland.
"I would emphasise that I have been disappointed by JV Driver's lack of financial investment in the business and the zero risk position it has adopted as majority shareholder.
"This stance is a key factor in the situation which the business now faces."
She added: "If the majority shareholder [JV Driver] is not prepared to invest in the business, it is very challenging to demonstrate that another commercial investor would invest."
She also said she was "extremely disappointed" that Perth-based SSE did not award work to BiFab.
READ MORE - Revealed - Up to £52.4m taxpayers money set to be lost as BiFab faces collapse
Ms Hyslop's comments come as government environment advisers issued a rebuke to ministers over their handling of the BiFab yards in Fife.
The Just Transition Commission, which advises on making the transition to a low-carbon economy has warned this switch could be undermined if ministers fail to secure manufacturing jobs.
And it believes this starts with offshore wind turbine platforms at the fabrication yards.
Prof Jim Skea, chairman of the Just Transition Commission - appointed by ministers - has written to them, saying that without "concrete action and investment, (they) risk repeating the current situation, with jobs and economic prosperity lost abroad".
Scottish Greens energy spokesman Mark Ruskell said the Scottish Government should not "hide" behind state aid rules.
“The majority shareholder of [energy company] EDF is the French government. The Scottish Government should do the same here with a national energy company and majority shareholdings in firms like BiFab. There is an enormous amount of potential in the number of wind energy contracts coming, and we need to make sure Scotland is ready to fulfil that potential," he said.
Liberal Democrat leader Willie Rennie Ms Hyslop had produced a "long list of excuses which will provide no comfort for the Bifab workers who were promised so much and after the SNP Government had boasted a short time ago that they had saved the company".
He added: “Work is already underway on wind farms off the Fife coast so it’s too late to blandly claim to be exploring all options. The SNP Government should be honest with people that they have missed the opportunity to create these jobs for Scotland. They have let down the workers.”
In a letter to the Scottish Parliament's finance committee, Labour MSP Alex Rowley said they should instigate an inquiry into the handling of the NnG contract.
In his letter to committee convener Bruce Crawford, Mr Rowley says: "I do not believe that we have been informed on critical issues of the progress of this case.
"First, the government claims that legal opinion exists that explains why it cannot help BiFab because of EU state aid rules, but will not tell us the gist of the opinion nor tell us who wrote the opinion and by whom it was actually commissioned. Ministers can decide that it is in the public interest to release legal opinions and this is what should be done now.
"Second, the government has failed, until the UK Government contacted them, to talk to the UK government even when the critical issue, is, they say, EU state aids and whether the guarantee could be ruled illegal. It seems strange to be dogmatic about EU state aids when we leave the EU before the work starts in Burntisland and do not know what the regime will then be."
"Third, the question of trust. A number of figures are being thrown around by the Scottish government suggesting liabilities that the company and I do not recognise.
"Fourth, North Sea renewable work is considered the ‘jewel in the crown’ for both Scottish and UK governments, but we are losing a stake in the North Sea because of our decisions. This was work that was won by BiFab, and the £30m contract would have secured income for BiFab. Withdrawing the guarantee at a time when we need work is a threat to jobs, the industry in Fife and to the Scottish renewables future."
The Scottish Government, in a bid to save it from closure in 2017, provided a £37.4m bailout and converted it to its 32.4 per cent equity stake in the company.
According to official 2018/19 accounts, that stake is worth just £2m because of expected losses.
It will be worthless if the company goes into liquidation.
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