Scottish government to invest in Ferguson Marine shipyard as ferry builder sought
Ferguson Marine Port Glasgow (FMPG) is nearing completion of MV Glen Sannox and sister ship MV Glen Rosa. The ferries are some six years late and estimated costs have ballooned from £97m to at least three times over budget.
Tuesday 16 July 2024 15:22, UK
The Scottish government has announced plans for a multi-million-pound package of support to help secure the future of the beleaguered Ferguson Marine shipyard.
Up to £14.2m will be invested over two years if the proposal passes detailed legal, financial and commercial scrutiny, which is expected to be completed by the autumn.
The support comes as a "competitive" process is now under way to award a contract to replace CalMac's ageing fleet of small ferries.
Publicly-owned Ferguson Marine Port Glasgow (FMPG) is nearing completion of MV Glen Sannox and sister ship MV Glen Rosa.
The ferries are some six years late and estimated costs have ballooned from £97m to at least three times over budget.
Following repeated delays, the delivery of the Glen Sannox is now expected the week beginning 19 August.
The Glen Rosa took to the water for the first time in April but is not expected to enter service until late 2025.
The Scottish government said it has been working with FMPG on a long-term business plan to help position the Inverclyde shipyard to bid for and secure new work.
Separately, talks are at final stages with BAE Systems for FMPG to secure further work on the Type 26 frigate programme.
Deputy first minister Kate Forbes defended investing more money into the shipyard.
She told Sky News: "Well, it's precisely to protect the taxpayer and islanders, as well as the yard, that we have come to the decision that we have come to today.
"That for the yard to have a sustainable future, we need to make the improvements and the upgrades.
"We have accepted in full the £14.2m ask from the yard that will deliver those improvements, enabling them to then secure work on the open market."
Both Glen Sannox and Glen Rosa have been designed to run on both traditional marine gas oil (MGO) and liquefied natural gas (LNG).
They are the first LNG-powered ferries ever built in the UK.
The Inverclyde yard was nationalised in 2019 when problems with the vessels were discovered.
The project has plagued the SNP politically for years and has been described as one of the biggest procurement disasters in the history of Scottish devolution.
Ms Forbes said: "When the Scottish government stepped in to save FMPG in 2019 we did so to preserve jobs and develop the next generation of shipbuilders on the River Clyde.
"That commitment remains unwavering.
"The company will of course be able to consider a bid, either individually or in partnership with other yards, but its long-term future depends on winning work on a competitive basis."
As Ms Forbes unveiled the Scottish government's plans for FMPG, Transport Scotland announced a procurement process is under way to award a contact to replace CalMac's ageing fleet of small ferries.
Phase one of the small vessels replacement programme (SVRP) will involve replacing seven ferries on the Clyde and Hebrides network with all-electric vessels.
The costs of the new boats - alongside port improvements and shore power upgrades - have been estimated at around £175m.
Ms Forbes confirmed the contract would not be directly awarded to FMPG.
She explained: "Extensive analysis and legal advice confirm that a direct award of the small vessels phase one contract to FMPG 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.
"Instead, we will do everything which is legally possible to support the yard and the workforce to secure a long-term future, which is why we have come to an agreement on initiatives and funding to improve productivity."
The invitation to tender is expected to be issued around September, with a view to awarding the contract in March 2025.
It will be led by government-owned Caledonian Maritime Assets Limited (CMAL).
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Tap hereThe new vessels will serve:
• Colintraive - Rhubodach (Bute)
• Lochaline - Fishnish (Mull)
• Tarbert (Loch Fyne) - Portavadie (Penisula)
• Iona - Fionnphort (Mull)
• Sconser - Raasay (Raasay)
• Tobermory - Kilchoan (Mull)
• Tayinloan - Gigha (Gigha)
Through redeployment of existing vessels and port works, the following two routes will also benefit:
• Largs - Cumbrae (Cumbrae)
• Oban - Lismore (Lismore)
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Transport Secretary Fiona Hyslop said: "The Scottish government is absolutely committed to improving our ferry fleet to better meet the needs of island communities, so I'm very pleased to see the procurement process for seven new small vessels get under way today.
"Our intention is that these ferries would be deployed on seven existing routes, but would also bring benefits to two other routes from the redeployment of existing vessels.
"These nine routes currently serve around 30% of the car and passenger carryings on the Clyde and Hebrides network.
"The new vessels will also be electric, helping us to deliver a significant improvement in emissions and local air quality and taking us towards a lower carbon ferry network.
"This procurement is a vital step forward in our plans to improve our ferry services and I look forward to following its progress closely over the coming months."