By Lucy Ashton
Ministers failed to tell the truth about a £30 million loan to struggling Ferguson Marine shipyard before it was nationalised, according to ex boss Jim McColl.
The Port Glasgow yard is at the centre of a scandal surrounding the massively delayed and over-budget construction of two new ferries. They were ordered in 2015 amid great fanfare from the SNP but the project soon ran into difficulties, with Mr McColl blaming the complicated demands of building eco-friendly boats that can run on either diesel or liquefied natural gas.
In 2018, the Scottish Government loaned the firm £30 million with ministers saying publicly it was to diversify the business and help it win other contracts. However, documents now show Ferguson Marine was already in trouble over the ferry contract.
Mr McColl told the Herald the real reason was not divulged in order to avoid state aid rules, which state that public money cannot be used to give an unfair advantage to companies.
He said: “The reason that the government gave for claiming that the £30 million loan was to further diversify the business was to avoid being accused of state aid. All of the funding by the government went towards progressing the build of the ships and this was verified.”
Ferguson Marine collapsed the following year and had to be nationalised in order to save the jobs and the two ferries, although they are still not completed and the cost has soared from £97 million to at least £300 million.
Public spending watchdog Audit Scotland is carrying out an inquiry into the scandal, although it has struggled to trace the vast sums of public money sunk into the yard over the years – including £128.5 million spent before it was taken into public hands.
Mr McColl said he would “bet my life” there was “nothing to see” in relation to the money trail and suggested the financial inquiry was a distraction from the blunders by ministers, ferry procurement firm CMAL and Transport Scotland.
The yard also received investment from his Clyde Blowers engineering firm, while CMAL paid up £82.25 million of the original £97 million contract – despite the two ferries being incomplete.
Mr McColl said that it was already known “exactly where the money went” and said: “The £82.25 million that was legally due to be paid to FMEL because they had completed all the milestones to qualify for the payments.”
Despite these sums, by 2018 internal Scottish Government documents reveal that the “urgent” £30m loan was required “immediately if severe cost-cutting measures and further significant delays to the CMAL order are to be avoided”.
One civil servant warned that without access to the further finance Ferguson Marine’s next planned step was to issue redundancy notices to around 230 workers from a total headcount of 280.
The Audit Scotland inquiry is also looking at why SNP ministers decided to go ahead with the contract without a refund guarantee from Ferguson Marine.
But Mr McColl said: “The lack of financial guarantees were not what created the risk, it was the serious failings in the original specification by CMAL. A bank guarantee would have been for a maximum of £97 million. We are looking at a £350 million -£400 million overrun on this. The guarantee is not the issue.”
Scottish Conservative shadow transport minister Graham Simpson, pictured right, said: “The very serious claims made by Jim McColl simply reinforce the case for a full, immediate, independent public inquiry into the SNP’s ferries scandal.
“Ministers have been evasive and secretive throughout this sorry affair, so the allegation that state aid rules may have been breached warrant detailed scrutiny.
“A cursory denial from the SNP Government won’t cut it, particularly when Audit Scotland has tried and failed to get to the bottom of the money trail.
“Scottish taxpayers and our betrayed island communities deserve definitive answers on every aspect of this SNP-made scandal once and for all.”