Ire over ministers' failure to sanction full Scots ferry fiasco probe

Audit Scotland confirmed it had been hampered in their attempts to conduct a wider investigation into what happened because it did not have statutory powers to make inquiries over Ferguson Marine as a private company under the leadership of tycoon Jim McColl.

Its focus would be on pre-nationalisation Ferguson Marine Engineering Limited (FMEL) which spent over £128.25m in public money in relation to the building of two wildly delayed and over budget lifeline ferries.

But since then no order has been forthcoming and now MSPs are putting pressure on the new wellbeing economy secretary Mairi McAllan to take action.

The former owner of the beleaguered shipyard firm Ferguson Marine has backed moves to allow the public spending auditor to carry out a wider investigation which should include the reasons for the soaring costs of the delivery of two lifeline ferries that remain incomplete at Ferguson Marine's Inverclyde yard.

He has said a ministerial order should be given that he believes should kickstart a full forensic probe into what happened while he was in control of Ferguson Marine - believing that the depth of the "scandal has not been properly exposed".

READ MORE: Compensation questions over 300-passenger axe to Scots ferry fiasco contract

He said any further investigation should go much further - and should look into why the costs went up. The public spending auditor has already come under fire over a refusal to carry an inquiry over allegations the awarding of the ferry fiasco contract to tycoon Jim McColl's Ferguson Marine was rigged.

Audit Scotland said in October 2022 that there were concerns and claims relating to whether state-owned ferry owners and procurers Caledonian Maritime Assets Limited (CMAL) "followed due process" in relation to the contract award in October 2015.

But now it has decided not to continue with inquiries into the procurement controversy.

A review subsequently carried out by a CMAL-commissioned senior lawyer into the procurement of the wildly delayed and over-budget lifeline ferries still to be delivered from the now-nationalised Ferguson Marine found no evidence of fraud though it found parts of the process were "not entirely satisfactory".

Barry Smith KC's report did state CMAL had the view during the procurement process and prior to the announcement that "Scottish ministers were determined that the contracts should go to [Ferguson Marine]".

But Audit Scotland in the wake of the CMAL-commissioned investigation and report had decided not undertake any further inquiries into the contract award affair.

The two ferries being built at the Inverclyde shipyard were due online in the first half of 2018, with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but are at least six years late. It has been confirmed that both are now to serve Arran.

Glen Sannox, was launched by Nicola Sturgeon nearly seven years ago and is not expected to be ready for passengers till August at the earliest.

Glen Rosa was meant to be delivered to CalMac in August 2018, but that is currently scheduled to be completed in May 2025 - meaning it would be ready for passengers the following August.

The dates of arrival and the costs have been in a constant state of flux as their construction has been plagued by design challenges, cost overruns and delays.

In the midst of the delays and soaring costs, Ferguson Marine under the control of tycoon Jim McColl fell into administration and was nationalised at the end of 2019 with state-owned ferry owners and procurers Caledonian Maritime Assets Limited (CMAL) and the yard's management blaming each other.

But Audit Scotland said there are legal issues getting in the way of their attempts to what happened before nationalisation properly scrutinise where the money went at.

That is because they say they do not have the statutory powers to undertake a forensic analysis of FMEL's records as it is was a private company, and therefore not a specified body subject to scrutiny under the Public Finance and Accountability (Scotland) 2000.

The public spending regulator has said that ministers said if ministers were to make a special order to make pre-nationalisation Ferguson Marine a body subject to scrutiny under the Act, it would allow them to undertake the forensic analysis of records.

But there has been no forward movement on the matter since MSPs wrote to the then wellbeing economy secretary Neil Gray in September urging him to make the order.

Now it can be revealed that new moves are being made for Ms McAllan to resolve what has been described by some as "apathy" over the matter.

Richard Leonard, convener of the parliamentary public audit committee has said in a message to the cabinet secretary:  "The committee acknowledges that due consideration must be given to this matter, including seeking robust legal advice.

"We are however disappointed that there are little signs of progress.... We therefore request details of the timetable to which Scottish Ministers are working to make a decision on this important issue."

A ferry user group official said that there appeared to be "little appetite" for a further delve into the scandal.

"We all want to see those ferries finally serving our islands, and we can finally see some light at the end of the tunnel on that score thankfully, but that should not be used as a distraction resulting in apathy over what went wrong and where the money went," he said.

"We have other ferries hopefully coming in the pipeline which could be built at Ferguson Marine and we cannot afford to make the same mistakes again."

Mr McColl has been calling on Audit Scotland to change the record that states that the contract was a fixed price contract as he says it was not. CMAL and ministers have insisted this was the case.

Issues over whether it was a fixed price led to CMAL refuting a claim for £67m over the £97m proposed price to complete the ferries under Mr McColl's Ferguson Marine.

The Scottish Government concluded two months before Mr McColl's Ferguson Marine went under nearly five years ago that there was no legal basis for CMAL to pay more than what it said was a £97m fixed price.

Mr McColl says if the extra costs claim had not been rejected because of the idea that it was a fixed price, the ferries would have been built for just £200m rather than the current costing.

The full unredacted contract for the building of the first of the two ferries, Glen Sannox , seen by the Herald, states that the buyer [CMAL] had the right to request "reasonable modifications and changes" and that the consequences "may included changes in the contract price, delivery date, capacity, draft, speed, fuel consumption, or any other provisions of this contract".

Another clause states that sums due or refundable as a result of "modifications and changes" shall be added to or deducted from the "final instalment".

A Scottish Government spokesman said they will reply in due course to the convener.

 “The Scottish Government remains committed to being as open and transparent as possible in relation to decisions around Ferguson Marine (FMPG) and vessels 801 and 802,"  a spokesman said.