THE leader of Inverclyde Council has written to ministers demanding new ferry contracts are handed to the shipyard firm at the centre of the ferry-building fiasco to preserve its future.

Stephen McCabe leader has called on the First Minister to intervene saying there needs to be clarity in the wake of concerns over the future of nationalised Ferguson Marine (Port Glasgow) Limited (FMPG).

The Labour councillor while a key figure in support for saving the yard and the jobs at the Port Glasgow shipyard has written to the First Minister to seek a clear direction for the yard and raising concerns that there is no firm date for the completion of the two ferries.

It comes after the Herald on Sunday revealed the Scottish Government-controlled owners of Scotland’s lifeline ferries flagged concern of a risk of administration for the ministers-controlled shipyard company.

An analysis from former managers of the Port Glasgow shipyard at the centre of a ferry-building fiasco referred to “inevitable failure for the business” because of the way it was being run.

Ferguson Marine which is controlled by ministers and supported by taxpayer cash, made a £100 million loss in its first four months of Scottish Government control.

Two previous companies running the Ferguson Marine shipyard have gone into insolvency in the past seven years.

Auditors for the state-owned FMPG have said there are no guarantees that it will continue to operate in the future although directors of Ferguson Marine have signed off recent financial statements on a “going concern” basis.

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Questions over Ferguson Marine’s status have come in internal discussions held by the owners and procurers of Scotland’s ferry fleet, Caledonian Maritime Assets Limited (CMAL), in considering continuing risks to them over failures in contracts to build two lifeline ferries.

The collapse last year of Ferguson Marine Engineering (FMEL) run by tycoon Jim McColl came amid soaring costs and delays to the construction of two lifeline island ferries and resulted in a Scottish Government management takeover.


The delivery of new island ferries MV Glen Sannox and Hull 802, which were due online in the first half of 2018, was found to be between four and five years late, with costs doubling to over £200m.

Mr McCabe, who co-chaired the original jobs task force to save the yard from closure alongside John Swinney MSP has called on the First Minister to put in place a system which means that Ferguson Marine would be awarded future ferry contracts by the government without having to compete with other privately owned yards.

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It is understood that a process would be required to ensure that any future proposal from Ferguson Marine represented value for money for the taxpayer. Ho When Ferguson Marine was taken into public ownership the then finance secretary Derek Mackay said: “We have always been clear that we want to complete the vessels, secure jobs and give the yard a future.

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“Public control will provide much-needed continuity of employment now and ensure the completion of the CMAL ferry contracts at the lowest possible cost to the taxpayer. It is absolutely essential that the outstanding contracts to build these two ferries are completed in order to sustain the Clyde and Hebrides Ferry Services network and provide vital support for the economies of our island communities.

“The alternative was for the government to stand aside while the company went into administration, resulting in the jobs being lost and the vessels not being completed. That was not an outcome I was willing to consider.

“We are now working to put in place a management team which will refocus all efforts on completing this vital government contract. We will also be working closely with staff and the trades unions – as well as suppliers and customers - to achieve the bst possible outcome for the yard.”

Mr McCabe said: "Nearly two years on there appears to be no firm date for the completion of the two ferries and there is growing media speculation once again over the future of the yard.


"Given that Ferguson Marine is one of Inverclyde’s largest employers, I am writing to you to seek a better understanding of the Government’s intentions for the yard and in particular your plans to secure further work beyond the completion of the two ferries that will provide continuity of employment for the current workforce but also deliver on the shared ambitions the Government and the Council had when our joint taskforce helped rescue the yard from Administration in September 2014.

"In this regard, I understand that CMAL has an allocation of £281m for vessels within Transport Scotland’s Infrastructure Plan and I would assume that arrangements can be put in place to make a direct award to Ferguson Marine to build the next phase of ferry vessels and help secure jobs at the yard?"

FMPG was set up by ministers as a vehicle to take over Ferguson Marine which had fallen into administration while trying to fulfill a disastrous ferry contract.

The Scottish Government has said it believes it was acting in the public interest in taking complete control of FMEL by December, as it saved the yard from closure, rescued more than 300 jobs, and ensured that the two vessels under construction will be completed.

Ministers have now taken over the contracts for the ferries and terminated the existing agreements with CMAL.

A Scottish Government spokesman said: “We have received Mr McCabe’s letter and will respond in due course.

“No decision has been taken on whether to pursue the direct award of vessel contracts to Ferguson Marine. As a major funder of the vessels and sole owners of the shipyard, it is only prudent that the potential benefits and issues around direct awards are fully explored and that this work does not prejudice any future decisions around vessel contracts.

“We stand firm on our commitment to the vessels, the workforce and the yard. We continue to work with partners to minimise the impact of delays and ensure the vessels, which are critical to supporting the lifeline ferry network and the Calmac fleet, enter service as quickly as possible and deliver the service improvements which our island communities depend upon.”