MINISTERS have come under fire for spending £620,000 of public money on an 'ignored' study to find out if proceeding with the ferry fiasco vessels was value for money.
The due diligence process, paved the way for the injection of a further £72m into Ferguson Marine in this financial year amidst a ferry-building crisis.
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.
Analysis of the money trail based on the Scottish Government's own accounting and audits shows that with the extra £72m sanctioned for this financial year, the cost to the taxpayer of supporting Ferguson Marine both before and after it forced its nationalisation has soared to more than £450m.
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Wellbeing economy secretary Neil Gray confirmed that the government was to proceed even though the project failed its value for money test.
He issued a rarely-used ministerial direction to overrule the value for money financial test saying completing the vessel at the nationalised yard was the fastest way of delivering more ferry capacity. That came after eight months of 'due diligence' over the extra funding requested by Ferguson Marine for this financial year.
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.
READ MORE: Ministers do not rule out more public money millions over ferry crisis
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.
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.
Now a written answer from Neil Gray to Scottish Conservative MSP Jamie Halcro Johnston reveals the “eye-watering cost” cost of the “due diligence”.
Scottish Conservative shadow minister for business, trade, tourism and enterprise Jamie Halcro Johnston MSP described the cost of the ‘value for money’ report as “the latest kick in the teeth to taxpayers and betrayed islanders in a never-ending scandal”.
He also urged Neil Gray to come clean and reveal the estimated cost differential between ploughing on with the completion of 802 and building a new vessel from scratch.
A ferry user group official said that it was important for the ferries to be ready to sail as soon as possible.
"There has to be inquiries into the colossal public cost of the ferry fiasco, and this latest bill is another headscratcher but enough is enough. Islanders just need ferries that work."
READ MORE: Anger as SNP blocks ferry fiasco compensation vote
Mr Gray accepted that the ministerial direction over funding was "rare" and said that without that the yard would have been put "in jeopardy".
But he said procuring a new vessel to replace Hull 802 would mean it would not be delivered till May, 2027 at the earliest and said that the value for money case for the second delayed vessel Glen Sannox had been met.
Mr Halcro Johnston said: “The SNP’s ferries scandal continues to hemorrhage public money on an industrial scale, while the wait for these lifeline vessels goes on.
“It’s a shameful testament to SNP mismanagement that their ‘due diligence’ revealed that completing 802 at Ferguson Marine did not represent value for money, and that it would be cheaper to scrap it and start all over again.
“On balance, ploughing on at Ferguson was probably the least worst option – as the alternative was even longer delays. But for an eye-watering £620k to have been spent on a so-called value for money report establishing it is not cost effective is the latest kick in the teeth to taxpayers and betrayed islanders in a never-ending scandal.
“At the very least, Neil Gray must come clean to taxpayers about how much cheaper it would have been to build a new ferry elsewhere, compared to finishing 802 which is still languishing in Port Glasgow.
“It’s typical of the SNP’s secrecy and lack of accountability throughout this national scandal that he has so far refused to do so.”
The long delays in the delivery of Glen Sannox and Hull 802 and a perceived lack of investment have had a major impact on the resilience of the ageing CalMac fleet, which has been hit by frequent breakdowns and soaring maintenance costs.
Wellbeing Economy, Fair Work & Energy Secretary Neil Gray said: “Our island communities deserve to be supported by two new, energy efficient vessels with the capacity and reliability required to support vibrant island economies.
“In setting out my decision to issue a written authority last month to enable work on vessel 802 to continue, there was clear, cross-party acknowledgement that this was the appropriate course of action – not least as it presents the fastest possible route to getting vital new lifeline services into service.
“It is right and proper that appropriate due diligence was undertaken to inform this decision. I also made it clear to Parliament that the narrow value-for-money assessment does not take into account the impact added delays would have on our island communities, nor the broader social and economic benefits of continuing the vessel’s build at Ferguson Marine.”
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