Ferguson Marine: costs associated with the completion of vessels 801 and 802

From: Cabinet Secretary for Finance and Economy Kate Forbes
To: MSPs

As per my commitment in the Chamber this afternoon, I share here with MSP colleagues a breakdown of the costs associated with the completion of vessels 801 and 802.

The figure referenced by Audit Scotland of £240 million includes £45 million of loans provided to Ferguson Marine Engineering Limited (‘FMEL’) prior to its administration, to support the business with working capital and business diversification. These are not direct costs associated with the project to deliver the vessels.

As I confirmed in the Chamber, the cost to complete the build of the ferries from the point of public ownership has increased from the £110.3 million to £114.3 million range previously communicated to Parliament in December 2019 to a range of £119.0 million to £123.0 million. This is an increase of £8.7 million, comprising £825,000 of costs associated with the legacy cabling issue and £7.875 million of overheads, labour and materials associated with schedule extension.

This brings the total direct project cost of delivering the vessels up to an estimated range of £202.3 million to £206.3 million once the contractual payments made by CMAL to FMEL of £83.3 million prior to public ownership are taken into account. We have also provided an estimate of the cost associated with contractual equipment warranties of £3.5 million for the first time in the spirit of transparency.

I hope this is helpful.