Nicola Sturgeon faces 'unlawful' ferries contract questions after Jim McColl says it was granted for political gain

Public spending auditors said ministers approved the calamitous ferries contract despite being warned that it carried “significant risks” for taxpayers.

And he said that he believed the decision to to overrule advice from experts and sign off the contract was made by the First Minister along with then transport minister Derek Mackay.

Scottish Conservatives have demanded the First Minister appear before the Scottish Parliament on Tuesday to answer the "extraordinary claims" of Mr McColl.

There are now concerns that Mr McColl's assertions could lead to legal challenges from the firms that lost out in the procurement process as it appeared set up to favour Port Glasgow-based Ferguson Marine.

Health secretary Humza Yousaf denied that it was awarded for "political purposes" saying: "The reason we were keen to secure the yard was to secure hundreds of jobs - hundreds of jobs and livelihoods that would be lost."

A confidential letter from the Transport Scotland Ferries Unit admitted just before the contract was signed in August, 2015 that the risk of a legal challenge from one of the five unsuccessful shipyards "cannot be discounted".

Caledonian Maritime Assets Limited (CMAL), the state-controlled firm that owns and procures CalMac’s ferries wanted to pull out of the contract weeks after the Ferguson Marine was named as the preferred bidder.

The contract for Glen Sannox and an unnamed vessel known as Hull 802 was awarded a year after businessman Jim McColl stepped in to rescue Ferguson, the last commercial shipyard on the River Clyde.

READ MORE: Call for Nicola Sturgeon answers as Jim McColl says she rushed through Ferguson Marine deal for political gain

The first ship was meant to enter service on the Arran route in the summer of 2018 but is not expected to be ready until next year at the earliest - five years late. Hull 802, destined for an Outer Hebrides route, has gone the same way. The latest estimated cost for both ships is at least around a quarter of a billion pounds, off an original fixed contract price of £97m.

Mr McColl has previously accused the First Minister Nicola Sturgeon of announcing the contract publicly before a price had been agreed and told the Herald last year that the SNP wanted to make political capital out of it.

He has also said that he believed he was a "pawn" in the Scottish Government's attempts to save the yard and while denying cronyism, that he got the contract due to his connections with previous SNP leader Alex Salmond and that the SNP government favoured the yard, and not him personally.

SNP ministers have come under consistent criticism over the awarding of the ships contract after it emerged Ferguson Marine submitted the most expensive bid for the work out of six competing yards, but won through with the highest specification and quality.

Mr McColl has doubled down on his criticism of ministers saying they acted in haste over the awarding of the ferries contract so it could be announced at their autumn conference in October 2015.

He said: “The audit report has revealed we were given the contract for political purposes. Everything was about the optics and timing the announcements for political gain."

He said he had made it clear to government and CMAL that he could not provide the mandatory refund guarantees for the contract.

He said: “There’s no question in my mind that the decision to ignore that, and to overrule CMAL’s advice, was made by the first minister along with Derek Mackay.

He told the Sunday Times: “The audit report makes clear that changes are still being made to the design, and hostility has continued between CMAL and the new management, so the cost will continue to increase."

Chris McEleny, stalwart Inverclyde councillor and general secretary of Alex Salmond's Alba Party said if what Mr McColl was saying was true that would be a breach of procurement rules.

"They knew there was a legal risk but still went ahead anyway with a contract that almost looks like it was set up to fail," he said.

"It’s simply not credible to believe that one of Scotland’s greatest ever industrialists, Jim McColl, was unable to run a shipyard that he put £29M of investment into. You just need to drive by the yard to see how much it was transformed. It’s scandalous that government officials keep repeating tired lines of blaming the former management, saying they’re committed to the completion of two vessels that CMAL design changes mean will likely never sail and that the government are committed to the long term future of jobs at the yard when their actions jeopardise them.

"If the unsuccessful yards see that this contract was awarded on political grounds, as has been suggested. then I can’t see what’s stopping them coming for a claim that could end up hitting the Scottish government with a combined bill of hundreds of millions."

The Scottish Conservatives say that Mr McColl's commentary suggests Nicola Sturgeon misled the Scottish Parliament by saying the contracts were signed off by Mr Mackay.

Scottish Conservative leader Douglas Ross said: "Jim McColl has made extraordinary comments that the First Minister herself must answer immediately.

"It's becoming clear why Audit Scotland couldn't find any evidence to support the government’s decision to agree this contract against expert advice. The decision looks to have been made for political gain, not for the benefit of taxpayers or the island communities who desperately need these ferries.

"From what Mr McColl has said, there are serious questions for the First Minister to answer. On Thursday, she tried to say this scandal was all Derek Mackay's fault but there is more and more evidence that she may have misled Parliament by making that claim.

"We're giving Nicola Sturgeon every chance to answer these shocking charges. There is no excuse for dodging responsibility and hiding from scrutiny. She must appear before the Scottish Parliament when we next sit on Tuesday to tell the public how and why their money was lost."

 READ MORE: Jim McColl: 'I was Scottish Government pawn in Ferguson Marine ferry fiasco'

During First Minister's Questions on Thursday, Ms Sturgeon said she did "not volunteer the information" about who the individual minister was that gave the green light for the contract.

But she added: "It is a matter of public record who the transport minister was at the time of the decision; it is a matter of public record that it was Derek Mackay."

And she went on to say: "This Government operates by collective responsibility and I am ultimately responsible for all decisions that the Government takes. The buck stops with me."

When tackled about 'throwing Mr Mackay under the bus' she added: " I did not intend to come here and do anything but accept full responsibility."

Giving evidence to MSPs at Holyrood over two years ago, Mr McColl said he was “stuck with” a cut-price contract for two ferries after it was announced prematurely by Nicola Sturgeon.

The tycoon behind Ferguson Marine said the First Minister publicly put a price of £97m on the pair of passenger ships while his firm were asking for £105m.

Mr McColl then alleged his firm was told by CMAL, the buyer of the two vessels - there was no more room for negotiation because the contract had been announced.

He added that after she made the announcement in August 2015 he was told “you’ll just have to accept it” and was left with no option but to agree to deliver the vessels at the lower price.

In announcing that Mr McColl's Ferguson Marine got the contract, the First Minister said: "This is an excellent result for Ferguson Marine Engineering...

"This contract will see the 150-strong workforce retained and more staff taken on at the shipyard, underlining our commitment to creating the vital jobs needed to boost local economies and help stimulate growth across Scotland.

"The Scottish government is committed to supporting ferry users around Scotland by providing safe and reliable services, and this is the latest step to ensuring we have a fleet that continues to deliver for the communities that depend on it."

But Mr McColl says he was “shafted” by the Government and called for a public inquiry into the ferry fiasco scandal, with witnesses placed “under oath”.

Ministers carried out a takeover after Jim McColl-led Ferguson Marine went into administration in August, 2019 following a dispute with CMAL over sprialling costs and "unforeseen complexities" over the ferries project.

Ministers believe they were acting in the public interest in taking control of Ferguson Marine, as it saved the yard from closure, rescued more than 300 jobs and ensured that the two vessels under construction will be completed.

During the weekend it emerged then Mr Mackay who would go on to oversee the nationalisation plan for the yard, was on holiday when the ferries contract was given the green light and it was Keith Brown, who is both deputy leader of the SNP and justice secretary in Ms Sturgeon’s cabinet, was asked to approve it in August 2015. At that time he was cabinet secretary for infrastructure, investment and cities.

The news of the Ferguson Marine contract win was given to SNP conference delegates on October 16, two months after the Ferguson Marine was declared the preferred bidder by the First Minister.

Audit Scotland said last week that ministers awarded the CalMac ferries contract to Ferguson Marine despite "severe misgivings" of their ship owners and initial concerns about the yard's inability to provide financial guarantees.

The auditors probe revealed that the Scottish Government was unable to provide any documentary evidence explaining why the decision was made.

It said that ministers sanctioned giving the contract to Ferguson Marine in 2015 despite the yard being unable to provide “mandatory refund guarantees” for the financial risk to CMAL.

It criticised a “multitude of failings” in the delivery Glen Sannox and Hull 802 which are now over five years late.

A spokesman for the Scottish government said it “operates under collective responsibility and remains focused on delivery of the ferries by Ferguson Marine”.

He said its actions had helped to secure jobs at the last remaining commercial shipbuilder on the Clyde.