Ministers stand firm in blocking release of ferry fiasco costs

MSPs are expected to discuss what further action to take after ministers continue to block disclosure of the full cost of the ferry fiasco.

The Scottish Parliament's Public Audit Committee has been continuing to try to break down the confidentiality veil around the affair after The Herald revealed that the Scottish Government entered into ten gagging clauses with external private companies concerning the state-owned and publicly funded shipyard firm Ferguson Marine at the centre of the fiasco.

It comes as some have raised concerns that oversight of the scandal is not robust enough to prevent further delays and increased costs.

The wellbeing economy secretary Neil Gray is being quizzed about how to prevent further problems, delays and extra costs in relation to the two long delayed and significantly over-budget vessels being built by the nationalised Fergsuon Marine shipyard firm in Inverclyde.

The detailed interrogation is being conducted as it emerged that public spending watchdogs Audit Scotland in an analysis in March 2022 stated the Scottish Government "is committed to paying the additional vessel costs, regardless of the final price".

The Herald revealed that the First Minister was given secret advice that the public cost of the ferry fiasco at Ferguson's is expected to soar even further than anticipated when ministers decided to continue to go ahead with much of the project despite it not being value for money.

Despite the warning given by the secret report by consultants Teneo, ministers decided that the job must be completed at the state-owned shipyard.

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And last week it emerged that further ship design issues with the so-called green fuel LNG was adding even more delay and costs to the project.

A Scottish Government due diligence review supported by a secret analysis by consultants Teneo said it would be cheaper to scrap the ship still being built at Ferguson Marine and place a new order elsewhere. It had been thought the Teneo report was subject of a non-disclosure agreement, but ministers have now cast serious doubt over that.

But the wellbeing economy secretary Neil Gray gave a rare shareholder authorisation known as a written authority in May to plough ahead with supporting the delivery of the two ferries at Ferguson Marine in May, saying it is the "platform upon which future success can be built".

He said that non-delivery of the ferries at nationalised Ferguson Marine (Port Glasgow) would put the very future of the yard and the jobs it supports "in jeopardy".

A similar shareholder authorisation in the form of a letter of comfort was made as the Scottish Government forced the awarding of the disastrous ferry contract to the then Jim McColl-led Ferguson Marine in October, 2015 despite concerns from state-owned ferry owners and buyers, Caledonian Maritime Assets Limited that there was no mandatory builder's refund guarantee.

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The Scottish Government has blocked information over the costs that led to Mr Gray's written authority citing that it was exempt in terms of the Freedom of Information Act – because its release would result in "substantial prejudice" to its commercial interests.

But in response to a Herald challenge to the Scottish Government's stance over the blocking of information relating to the costs around the value for money assessment, ministers are now no longer relying on its previous stance that any publication would cause substantial prejudice to Ferguson Marine.

Instead, they are using another loophole that claims exemption because its disclosure would cause "substantial prejudice to the effective conduct of public affairs".

It came after public audit committee convener Richard Leonard told Mr Gray that "there is no such caveat regarding commercial confidentiality in the Scottish Public Finance Manual for the publication of a written authority".

He told Mr Gray: "It therefore seeks to establish why the Scottish Government considers there to be issues of commercial confidentiality when it comes to publishing occurrences of shareholder authorisation for companies wholly owned by Scottish ministers."

But Mr Gray maintained the information block saying: "The point previously made around commercial confidentiality was simply to highlight that there may be various circumstances under which a shareholder authorisation is requested or provided and we therefore cannot guarantee that there would not be commercial confidentiality issues.

"Similar to any instance of written authority, the disclosing of any details around shareholder authorisations would require Scottish Government to observe legal and contractual obligations in respect of the detail to be disclosed."

Mr Gray also said that an NDA was signed in preparation for "confidential information" being shared ahead of a contract award relating to the due diligence report on the costs for both ferries.

The other parties to that contract were the now nationalised Ferguson Marine (Port Glasgow) Limited (FMPG) and Scottish Government advisors, Teneo and Woodbank Marine.

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He said: "That NDA did not extend to the completed due diligence report. As it transpired, the NDA was only finalised by all parties on the day the contract was signed (on September 29, 2022), meaning it was immediately superseded.

"With regards to the other NDAs referenced...  these remain active and relate to ongoing commercially sensitive work. I am therefore unable to provide the details..."

The Scottish Parliament's Public Audit Committee is expected to further examine the ministerial response.

Edward Mountain, the convener of the net zero, energy and transport committee has been demanding answers over the level of oversight of the disastrous project – as the costs continue to soar.

He previously wrote to Mr Gray to ask him to detail how oversight of Ferguson Marine by government and its agencies is being practically carried out to "protect the taxpayer's ongoing investment".

He has also asked whether improvements to governance and project management that public spending watchdogs Audit Scotland and other parliamentary committees have said are necessary to reduce further delays and costs to the taxpayer have actually been made.