Ferguson Marine update

Economy Secretary Derek Mackay has given an update to Parliament on the Ferguson Marine shipyard which has now been taken into public ownership.

Mr Mackay highlighted the progress that has been made at the yard in recent months while also outlining details from a new report which looks at the overall state of the business.

The report provides the latest information on the two public sector ferries being built at the yard including design issues, quality control and management processes in the business prior to it going into administration.

The additional cost to complete the two ferries is now estimated to be between £94.8 million to £98.8 million which includes the management and operation costs of the yard.

The estimated delivery window for the MV Glen Sannox, which will operate on the Ardrossan to Brodick route, is October to December 2021. The estimated window of delivery for the second vessel, which will operate on the Uig to Tarbert and Lochmaddy route, is July to October 2022.  

Mr Mackay said:

“We have been working for over two years to find a resolution to the difficulties at Ferguson Marine and our priorities still remain the completion of the two public sector ferries, protecting jobs, and securing a long-term future for the yard.

“This report highlights why public ownership was the only option open to us to deliver these outcomes and why it was the right thing for the Scottish Government to step in when we did.

“In particular, the report sets out in stark detail the failings of the previous management and the impact that this has had on the condition and progress of the ferries being constructed at the yard.

“I am now focussed on the future and want to do everything in my power to make Ferguson Marine a success for its skilled employees and the wider community.

“I am pleased that we are seeing good progress at the yard including the recruitment of new staff. The detailed understanding we now have of what it will take to complete the ferries is also a huge step forward.

“While there is a lot of hard work to be done, the alternative for the Scottish Government was to walk away, which would have resulted in hundreds of job losses, the yard’s closure and our vital ferries not being finished. I am not willing to walk away.”

Background

The Programme Review Board report is available on the Scottish Government website.

The contract for the vessels had an original value of £97 million with anticipated delivery of mid-2018.

Parallel to the report a suite of documents will be published today which set out the detail of the Scottish Government’s engagement with Ferguson Marine since the award of the contract to deliver the two ferries in 2015 until the business entered administration in August.

These papers outline the issues faced by the business and the position of the Scottish Government in acting in good faith to secure a future for the yard.

In August 2019, as a result of the extensive cost and time overruns to the two vessels under construction, severe cash flow limitations and a lack of future business opportunities, the Directors of Ferguson Marine Engineering Ltd gave notice of their intention to put the business into administration. In order to remove the threat of closure, Scottish Ministers took control of the yard.

The commercial transaction to bring the yard into public ownership was completed on Monday 2^nd December 2019, establishing the new business, under the name of Ferguson Marine (Port Glasgow) Ltd.