MINISTERS are prepared to sink millions more into Scotland's crisis-hit nationalised shipyard firm to ensure it has a commercial future - before it is privatised.
It has emerged that a multi-million-pound tranche of capital expenditure has been requested by Ferguson Marine as part of a plan to make it more competitive is being evaulated by the Scottish Government.
The move comes on top of the decision to inject a further £61m into the Ferguson Marine (Port Glasgow) shipyard this financial years amidst a ferry-building fiasco.
It comes as Ferguson Marine chief executive David Tydeman has indicated that it is hoping for a significant order for the building of ships for the UK and Scottish wind farm market. They say they are in discussions and are working on preliminary designs for the ships and that it could create ten to 15 years of work.
He says it comes from a "commitment" from two major operators in the wind farm market to build ships in Scotland. But he indicated that it was a longer term project with ships may not be built till 2027 "which doesn't fill the immediate gap".
But he has said it is a "very significant opportunity for the future".
The Ferguson Marine board admitted there was a "significant doubt" over its ability to continue as a going concern due to doubts over future funding in its last 2021/22 financial statement.
And Auditor General Stephen Boyle (below) said at the end of April that there remains doubts over the long term future of the shipyard firm because of a lack of a business plan.
Ministers were accused of presiding over an “outrageous mismanagement of public funds” after pressing ahead with the second ferry at the Ferguson shipyard, known only as Hull 802, despite learning it would be cheaper to scrap the vessel and tender for a new one.
In March it was confirmed that due to "persistent design gaps and build errors" the first of the two Ferguson Marine vessels, Glen Sannox is scheduled for autumn 2023 rather than the end of May 2023 with a "contract backstop" of no later than the end of December 2023.
Hull 802 is now not expected to set sail till the autumn of 2024 having already been delayed to the end of March 2024. The contract backstop was stated as being at the end of December 2024.
READ MORE: Auditor concerns over shake-up of bonus culture at Ferguson Marine
They were originally due to set sail in mid-2018 with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but they are well over five years late. It is suggested the costs of delivery may quadruple compared to the original £97m contract costs.
The two ferries for CalMac were ordered in 2015 when Ferguson Marine was owned by Jim McColl, a then pro-independence businessman who rescued the Inverclyde yard from administration a year earlier.
When the build ran into trouble, the shipyard firm fell into administration and was nationalised with Mr McColl and the government-owned ferry owning and procurement agency CMAL blaming each other for the fiasco.
The Scottish Government's accountable officer for the yard, the general economy director Gregor Irwin said a secret report commissioned by the Scottish Government from consultancy firm First Marine International (FMI) is punctuating ministers' decision-making on how it deals with Ferguson Marine.
He indicated that privatisation would come after the shipyard firm was on a sure footing.
He has confirmed that investment from the Scottish Government was needed for longer term yard plans which are subject to a new wave of due diligence.
External advisors have been brought in to help with the process and that
"It is it is clear that to raise the productivity of the yard and ensure that we can take advantage of all of these commercial opportunities that further investments will be required.
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"The key objective for the yard has always been to secure shipbuilding on the Clyde, to ensure that we maintain shipbuilding skills and that there's a strong sustainable commercial future for the yard with investment, winning new orders, taking advantage of the commercial opportunities identified. That's all part of that. Then the questions around future ownership structures, they follow from that. The key is to secure commercial success for the yard."
The Ferguson Marine board have said that it is felt that for the shipyard to improve its efficiency and to be competitive in the broader market, it must secure a pipeline of repeatable work over several years.
READ MORE: CalMac ferry remains sidelined months after rust and engine issues
And it highlighted two opportunities - the 'loch class' project and the development of work in support of the warship programme with BAE Systems.
It was recognised by the board as "strategically important for Ferguson Marine" prior to any other consideration of more complex, larger vessels in the future.
The vital contract work from BAE Systems - which is delivering City Class Type 26 frigates on the Clyde and trumpeted as "signalling a new dawn" at the yard was valued at just £2m.
Mr Irwin has told MSPs of the secret FMI report: "It is a very important piece of work. It's absolutely right that we commissioned first class, external, independent technical advice that allows us to understand in detail what it would take to bring the productivity of the yard up to the average standard for Northern European shipyards. So [Ferguson Marine] is well placed to win new orders and to get on that path to a sustainable commercial future.
"That sort of advice may not come cheaply, but it is very important and it's absolutely integral to the work that's underway in the yard at the moment to develop a long term business plan and it's still ongoing.
"This is one of the things that is necessary in order to make sure that the right decisions are taken to put the yard onto that pathway towards a sustainable future."
The financial collapse of Mr McColl's Ferguson Marine which runs the last remaining shipyard on the lower Clyde, in August 2019, came amid soaring costs and delays to the construction of the two ferries.
It came five years after tycoon Jim McColl first rescued the yard when it went bust.
Audit Scotland has continued to raise questions about the yard's future despite attempts by new management to map out a long-term plan beyond the delivery of the two ferries.
Nationalised Ferguson Marine has previously responded to concerns over its status as a going concern by insisting there is a strong future for the business, despite its last annual financial review for 2021/22 admitting there was "significant doubt" over its ability to continue as a going concern.
The board of directors went on to say that they are working with the Scottish Government to "continue to develop our strategy and processes to deliver a sustainable business model which will secure the long-term position of the company".
The Scottish Government in response to concerns said its priorities were to complete the ferries and secure the yard's future, while the deputy first minister said that ministers remained "committed to do all that we can" to help achieve a prosperous future for the yard.
Ferguson Marine say the BAE contract involving fabrication work for just one of the Type 26 vessels being built on the Clyde is around 5% of the value of what the yard might secure if it completes what was a pilot project well.
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