Ferguson ferries: Government set to lose over £35m

It has emerged that a key part of a special incentive that allowed Ferguson Marine to seal a £97m contract to build Glen Sannox and Glen Rosa at the Port Glasgow yard meant that Scottish Government-owner Caledonian Maritime Assets Limited (CMAL), which owns and procures vessels, would not have to pay back all the public money given to support the project - as would normally be the case.

The deal was put together to reassure Port-based agency CMAL that it would not be out of pocket if anything went wrong, as executives had 'severe misgivings' over Ferguson Marine's inability to provide mandatory financial guarantees.

The loss is on top of £45m in taxpayer-funded loans that were given to prop up Ferguson Marine when it was plunged into crisis over delivering the ferries, and lost when it fell into administration in August 2019.

According to an official money trail, the  Scottish Government's Transport Scotland agency ended up providing CMAL with £106m of public money by way of loan to cover the costs of the project, including the original £97m contract and over £9m more covering further costs such as the ferry procurer's management and crew familiarisation outlay.

Full details of the financial implications of the deal have come as it was confirmed that there has been no money paid to the Scottish Government by CMAL in relation to the loan. 

CMAL would normally have been expected to pay off the loan with interest typically in 20-25 years using revenue it generates from the fees they get from the lease of vessels like CalMac's ferry fleet and harbour access charges.

But ministers sanctioned the scrapping of the loan agreement after Ferguson Marine went into administration and delays to the ferries soared.

Instead, it sanctioned that CMAL would only pay back the market value of the vessels as decided by an independent shipbroker from Transport Scotland on delivery.

Industry experts expect the market value of the vessels, if delivered, to be a total of between £50m and £60m - leaving the public purse out of pocket to to the tune of over £37.95m.

The Scottish Government has said there will be a new 'voted loan' with interest.

Mr McColl, one of Scotland's richest men, had acquired Ferguson Marine out of insolvency 11 months before becoming the preferred bidder.

He later claimed he felt he was a "pawn" in the Scottish Government's hunger to save Ferguson Marine to protect Scottish jobs.

SNP ministers came under fire for wasting public money after an inquiry into the ferries fiasco found that Ferguson Marine submitted the most expensive bid for the work out of six competing yards and also the highest specification.

The two dual-fuel ships are six years late, with costs expected to quadruple from the original £97m contract.

The CMAL loss comes on top of the of the two lost loans for £30m and £15m given to Ferguson Marine by way of Scottish Government intervention as the ferries project got into trouble.

Ministers' public pronouncements at the time of the £30m loan in the summer of 2018 stated that it was in place to diversify the business – but it was revealed through confidential internal Scottish Government papers that it was because Ferguson Marine was in financial trouble while dealing with the contract.

The Scottish Government began the process of taking control of the last civilian shipyard on the Clyde in August 2019 as it went under as a result of the ferry fiasco.

It said it believed it was acting in the public interest in taking complete control of Ferguson Marine as it saved the yard from closure, rescued more than 300 jobs, and ensured that the two vessels under construction would continue.

A Scottish Government spokesman said: “The original contract was cancelled along with the loan. The normal voted loan process will apply when the vessels are handed over and this will be based on market value at the time of the handover.

“We have been open and transparent about this process."