A MAJOR blow has been dealt to hopes of Ferguson Marine being directly awarded a key ferry work contract – as the Scottish Government unveiled a new £14.2m investment package aimed at making the yard ‘sustainable’.
Pleas for the troubled Port Glasgow yard to be directly handed a contract to construct new electric ferries for CalMac have fallen on deaf ears and a competitive tender process has now been launched.
Local politicians have expressed their disappointment at the move but welcomed the news of more money coming into the yard.
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In a statement issued today Scotland’s Deputy First Minister Kate Forbes said a direct award of the work to Ferguson’s ‘introduces substantial risks and uncertainties for the shipyard and the communities which rely on the lifeline vessels’.
Ministers have also agreed to support a suite of new proposals which would see £14.2m funnelled into the yard over the next two years, subject to the plan passing legal analysis and independent assessments this autumn.
The aim of the investment is to ready the yard to bid for and secure new work after it hands over the overbudget and overdue Glen Sannox and Glen Rosa ferries to CalMac, which it was originally due to deliver in 2018.
Ms Forbes said: “Now that Glen Sannox is approaching handover, our focus is on the next phase for FMPG’s future.
“That requires change and investment to target new opportunities.
“The board has developed a business plan that it believes has the potential to secure a competitive future.
“Subject to independent legal and commercial analysis, the Scottish Government will provide significant new funding to support the yard’s modernisation and improve productivity.
“Additional funding goes hand in hand with winning new commercial contracts, and it is extremely good news that talks with BAE Systems to secure further work have reached this advanced stage.
“Extensive analysis and legal advice confirm that a direct award of the small vessels phase one contract to FMPG introduces substantial risks and uncertainties for the shipyard and the communities which rely on the lifeline vessels, due to the strict conditions imposed by the UK Subsidy Control Act.
“Instead, we will do everything which is legally possible to support the yard and the workforce to secure a long-term future, which is why we have come to an agreement on initiatives and funding to improve productivity.
“When the Scottish Government stepped in to save FMPG in 2019 we did so to preserve jobs and develop the next generation of shipbuilders on the River Clyde.
“That commitment remains unwavering. The company will of course be able to consider a bid, either individually or in partnership with other yards, but its long-term future depends on winning work on a competitive basis.”
Transport Secretary Fiona Hyslop also confirmed on Tuesday that the first stage of the competitive tender process for the Small Vessels Replacement Programme’s £175m first phase had now begun, with invitations to tender expected to be sent out in September.
It was also revealed yesterday that separated talks have taken place between the Scottish Government and defence firm BAE Systems about securing further warship work for the yard through the Type 36 Frigate programme.
Inverclyde’s MP Martin McCluskey said it was ‘very disappointing’ that the calls for a direct award had been snubbed.
He added: “People will be left wondering why Scottish Government Ministers aren’t willing to award the contract to a Scottish Government owned yard in order to protect jobs.
“While the investment in the yard is welcome, what is needed is a sustainable order book that can secure shipbuilding on the lower Clyde, and the jobs and skills that come with it.
“It is important that the yard tenders for this work and the Cabinet Secretary gives any submission from Ferguson Marine the consideration it deserves.”
Greenock and Inverclyde MSP Stuart McMillan told the Telegraph gave the news of further investment and the possibility of further work a ‘warm welcome’ and said it showed the Scottish Government’s commitment to Ferguson’s.
He added: “I am however disappointed that the Small Vessel Replacement Programme will be put out to competitive tender and therefore will not be directly awarded to Fergusons – especially because there has been political consensus that the SVRP should be directly awarded to the yard.
“I am conscious however that at the recent GMB Fergusons Summit, the Deputy First Minister set out the difficulties it would create with potential legal challenges being brought against the Scottish Government.
“While I obviously want this work to come to Port Glasgow, I acknowledge that a direct award has many challenges and could cause further delays in delivering the new ferries that our island communities need and deserve.
“This was never going to be an easy decision and again, while I am disappointed that the SVRP has not come to Ferguson Marine, I take heart in the government’s investment into the yard.
“I will wait however to take a final judgement on today’s announcements until we have more detail about job retention and about the scale of the BAE work coming to the yard.
“I’ve already had dialogue with the Deputy First Minister and GMB shop stewards and will continue to engage with them on this in the days and weeks ahead.”
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