MINISTERS have been criticised for a "disdainful" dismissal of inquiry findings that showed a "catastrophic failure" in the procurement of two lifeline Scots ferries which have hampered by soaring costs and are subject to up to five years of delay.

The convenor of a Scottish Parliamentary committee that produced the findings accused connectivity and islands secretary Paul Wheelhouse of "ignoring" concerns over the £45m in taxpayer loans to the Ferguson Marine shipyard made before its financial collapse in August, 2019 led to a state takeover.

The rural affairs and connectivity committee inquiry came as the delivery of two lifeline island ferries MV Glen Sannox and Hull 802 which were due online in the first half of 2018 were found to be between four and five years late, with costs doubling to over £200m.

The owners of the last civilian Clyde shipyard went into administration following a dispute with Caledonian Maritime Assets Ltd - the taxpayer-funded company which buys and leases publicly owned CalMac's ships on behalf of the Scottish government.

In their 129-page report, the committee called for a “root-and-branch overhaul” of the ferry procurement process, declaring that established procedures are “no longer fit for purpose”.

Mr Wheelhouse responded by saying ministers do not accept there was a 'catastrophic failure'.

He said that acting to secure hundreds of skilled jobs and wider economic activity cannot be described as failure.

He set out the Scottish Government’s view, that “contractor failure has been a very significant factor in the difficulties we have seen arise”.

The Herald:

But Edward Mountain, the convener of the committee, told ministers to "face up to the catastrophic failures that have contributed to the miriad of problems with this contract".

He told the Scottish Parliament: "It is simply not good enough to dismiss the conclusions reached unanimously by this committee on a cross-party basis. One simply cannot blame the contractor for all the failures.

"Good leaders and good systems prevent failures. Poor ones don't. "We must ensure lessons are learnt and that the costly and damaging mistakes that are evident here are never ever repeated."

Around £45m in Scottish Government loans to keep the yard afloat have also been written off.

The committee highlighted a "total lack of transparency" over the purpose, agreement and payment of these loans.

And Mr Mountain said there has been a "complete amazement" over the response to the loan issues.

"It is disappointing that the minister wants to ignore these findings.

"These loans have effectively been written off as a result of the nationalisation of the shipyard.

"It is therefore essential that the Scottish Government honours its commitment to co-operate fully with Audit Scotland in investigating the process it followed.

"The committee uncovered a cluttered decision making landscape lacking in transparency. It is clear all decision-makers involved, including the Scottish Government, have failed to some degree to effectively discharge their responsibilities. "We accept that plans are already underway to review the current legal structures and governance arrangements around the provision of ferry services.

"Despite the minister's belief that the current arrangement works well, this review must reflect root and branch overhaul the committee called for."

The Herald:

He said the minister "should be mindful" of the committee's suggestions that this could result in certain bodies being merged or perhaps even abolished.

"The committee concluded the approach to procuring and delivering new ferries has to date been short term, piecemeal and lacking in strategic direction," he said.

"We cannot afford to have an increasingly aging and unreliable fleet which causes major service disruptions on a regular basis.

"It is clear that the procurement process that the minister attempts to defend was not fit for purpose. There can be no bigger failure in the process than inability to identify at the outset that the bidder lacked the management and finanical capabilities to fulfil the contract.

"That is precisely why the committee has called for an independent external review of the procurement processes.

"The minister clearly needs to reflect further on this recommendation and to take steps to ensure lessons are learnt and that failures are not repeated.

Mr Wheelhouse repeated his stance that the saving of the 100s of jobs was "I hope we can all agree, a positive outcome".

He agreed lessons had to be learnt and added: "I accept the committee has the right to take its own view on these issues, the government has the right to its view as well."

“However – and I stress this for the convener’s benefit and for other members of the committee – we do recognise that in relation to the two ferries, and the delay in their delivery, the outcome has been particularly impactful on communities awaiting the delivery of ferries that have yet to be completed and clearly the cost outturn and delays are far from what was anticipated or desired at the point of contract award to FMEL."

He added: “However, I would again reiterate our view that contractor failure played the primary role in these difficulties and we are disappointed this was not more fully reflected in the final report, although I accept the committee has to take its own view but the government is also entitled to take a view as well.”

Mr Wheelhouse added that the Scottish Government has already began to implement some recommendations, including a study of the procurement process for ferries.

Tory MSP Graham Simpson, who also sits on the committee, said the minster should be eating “humble pie” over the scandal.

He said: “In essence the minister, or whoever it was in Transport Scotland who wrote his response, was saying to the committee ‘we gave you the evidence but you didn’t listen to us, so you are wrong’.

“At the heart of this is the complete failure to deliver two ferries on time and on budget, they are neither.”

The report in December said the Scottish Government was too willing to press ahead with the ferry project despite the risks involved and stated CMAL and Transport Scotland’s due diligence was “inadequate”.

It also found “strong evidence” to suggest Ferguson Marine continued to build the ships incorrectly to ensure it would receive “milestone payments” that CMAL was legally obliged to give it after completion of certain stages of the project.