For people who understand the importance of the hundreds of jobs at Ferguson Marine and are passionate about harnessing Scotland’s shipbuilding heritage for future prosperity, the Port Glasgow yard’s defeat in the battle to build seven small ferries for CalMac is undoubtedly a bitter blow.
The jobs are, of course, vital for the individuals who hold them and their families. Furthermore, we overlook at our peril the value of this employment to an Inverclyde economy which does not have its challenges to seek.
And that makes the politicking over the yard, which currently employs 305 people and has been owned by the Scottish Government since being nationalised in 2019, all the more dispiriting.
The politics ratcheted up a notch again today after the Scottish Government’s Caledonian Maritime Assets Limited (CMAL) announced that it intends to award the contract for the seven fully electric vessels to Poland’s Remontowa Shipbuilding.
Conservative MSP Sue Webber declared: "This announcement is devastating for Ferguson Marine and could yet prove the death knell for the yard.”
She added: “It should be a given that a nationalised shipyard wins a Scottish Government contract. Yet it’s a measure of how badly the SNP have mismanaged Ferguson’s that ferries which should be built on the west coast of Scotland are instead to be made in Eastern Europe.”
This sort of finger-pointing might be politically appealing but it is disheartening because there are hundreds of valuable jobs at stake here. And, while Ferguson Marine’s failure to win the contract is a significant setback for the yard, phrases such as “death knell” do not seem particularly constructive.
Ferguson Marine has been a real political football in recent years, amid major cost overruns and delays in the building of the much larger Glen Sannox and Glen Rosa ferries for CalMac, under a contract awarded by CMAL in 2015.
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What kind of person would want Ferguson Marine shipyard to fail?
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Ferguson Marine news from Kate Forbes divides opinion
The Scottish Government has committed to substantial investment at Ferguson Marine to improve productivity.
Deputy First Minister Kate Forbes last July announced a planned £14.2m investment in Ferguson Marine by the Scottish Government.
She noted this investment, over two years, would be focused on modernisation and improving productivity, with the Scottish Government stating its aim at that point of “building a sustainable future” for the yard.
The announcement of the investment was accompanied by the more disappointing news that the contract for the seven fully electric ferries for CalMac would be put out to competitive tender, rather than being awarded directly to Ferguson Marine.
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Ms Forbes said last July: “Extensive analysis and legal advice confirm that a direct award of the small vessels phase one contract to FMPG (Ferguson Marine Port Glasgow) introduces substantial risks and uncertainties for the shipyard and the communities which rely on the lifeline vessels, due to the strict conditions imposed by the UK Subsidy Control Act.”
As law firm Slaughter and May notes, “the Subsidy Control Act represents a development of the UK subsidy control regime that came into effect at the end of 2020 as part of the implementation of the UK’s commitments in the EU-UK Trade and Cooperation Agreement”.
Today, confirmation came that Ferguson Marine, which made it through to the final round of bidding for the phase one contract, had lost out to Remontowa Shipbuilding.
CMAL, setting out the basis on which the decision had been made, declared: “Following an initial exercise to identify suitably qualified and experienced shipyards, six were invited to tender for the contract, with five yards returning responses.
“Bids were robustly assessed against technical and financial criteria, with a 65%/35% weighting, respectively. The panel scoring the bids consisted of third-party marine specialists and experts from CMAL. When scores across criteria were combined, Remontowa’s bid achieved the highest score and was identified as the winning yard.”
Asked for his view by The Herald today, Paul Sheerin, chief executive of industry body Scottish Engineering, declared: “I honestly can’t understand [why] we do not assign the correct value of the investment in a community to bring well-paid, quality careers to an area where they are valued and essential. It feels like we are measuring the wrong criteria for social and economic value from such a major public contract.”
Mr Sheerin had highlighted his belief back in December that the features of the contract for the seven small ferries would “be a great match for Ferguson Marine at this stage of their journey to being a stable, commercially competitive shipbuilder”.
He noted then: “Keen observers have pointed out that the size of these vessels at 50 metres long is just one of the similarities to three small ferries previously built by Ferguson Marine, on time and to cost.”
Management at the Port Glasgow yard highlighted a focus on the future after today’s news that Ferguson Marine had lost out to Remontowa Shipbuilding.
A contract for three more fully electric ferries will be awarded in phase two of the small vessel replacement programme, which CMAL noted today will be procured through a separate competitive tender process later this year.
Ferguson Marine chief financial officer David Dishon said today: “We remain optimistic about the future of the yard and ongoing discussions with commercial partners continue to progress with promise. We have also begun to plan the first phase of the £14.2 million in capital investment from the Scottish Government, which will support us in making vital updates to the yard, its equipment and infrastructure.
“We’d like to thank CMAL for the opportunity to bid for phase one of this contract, and look forward to finding out more about phase two in due course.”
While Ferguson Marine’s ultimate defeat in phase one is undoubtedly a major blow, there is nothing else to be done now than look forward, and hope there is soon some better news for the yard and that the investment under way will support its long-term future.
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