SECRET SCOTLAND: SNP Ministers are now facing a £5 million claim in a dispute over a hidden clause in ferry fiasco

By Democrat reporter

Catastrophes are piling up one after the other for SNP government Ministers who are now facing a £5 million claim in a dispute over a secret deal that paved the way to the nationalisation of the Clyde shipyard at the centre of Scotland’s ferry building fiasco.

Details of the claim have come as it emerged that the Scottish Government ‘gave up’ £21 million in insurance payments in relation to the collapse of Ferguson Marine Engineering Ltd as part of the confidential agreement.

The procurement of two ferries from Ferguson Marine was “a catastrophic failure”, a Holyrood committee said after an inquiry into the doomed deal to deliver two ferries to be used on the west coast by 2018 at a cost of £97 million.

MSPs were told by the disgraced finance secretary Derek Mackay, above right,  that “mismanagement” by the Port Glasgow shipyard led to delays and overspends.

The vessels were expected to be delivered by 2022 and 2023 at almost double the original cost, but now even those dates are in doubt.

An extensive inquiry by the Rural Economy and Connectivity Committee at Holyrood said the procurement process was “not fit for purpose” and called for an “independent external review” to take place.

Throughout the inquiry, witnesses spoke of a project fraught with problems, including a breakdown in the relationship between Ferguson and Caledonian Maritime Assets Limited, the Scottish Government-backed procurement body.

In a 129-page report, the committee said the Scottish Government was too willing to press ahead with the project despite the risks involved and stated CMAL and Transport Scotland’s due diligence was “inadequate”.

It concluded: “Based on the extensive range of evidence it has received, the committee believes that there has been a catastrophic failure in the management of the procurement of vessels 801 and 802, leading it to conclude that these processes and structures are no longer fit for purpose.

“The committee therefore calls on the Scottish Government to commission an independent external review of the processes for public procurement of ferries to ensure appropriate lessons are learned for the future and to keep the Committee updated of its progress and conclusions.”

The committee also found “strong evidence” to suggest Ferguson Marine continued to build the ships incorrectly to ensure it would receive “milestone payments” that CMAL was legally obliged to give it after completion of certain stages of the project.

That report said: “The committee has been appalled to learn that CMAL was legally bound to continue to make milestone payments on the ferries contract despite ongoing concerns about the performance of the contractor.

“The committee also questions why CMAL continued to make milestone payments in a situation where the sign-off of the basic design of the vessels had not been secured from class or flag.

“Furthermore, there is strong evidence that the contractor deliberately proceeded to construct specific sections of the vessel either out of sequence or not according to the proper specification purely as a means of triggering milestone payments on the contract.”

A Scottish Government spokesperson said then: “Scottish Ministers were grateful for the opportunity to present evidence to the committee during its inquiry.  We will consider the report and respond to its recommendations in due course.

“We have already committed to commission a study of the legal structures and governance arrangements which exist between the “tripartite group” of Transport Scotland, CMAL and Calmac and will publish a ferries stakeholder engagement strategy.
“We remain committed to those actions, to Scotland’s lifeline ferry services and to the communities they serve.”
Calmac ferries going about their business on the island routes from Oban. Pictures by Bill Heaney 

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