Auditor slams ‘multiple failings’ on £240m ferries

A report from Audit Scotland has slammed the “multiple failings” that have led to the massive delays and cost overruns that continue to obstruct the delivery of two lifeline ferries for the Scottish islands.

The report said major problems remain unresolved at the Ferguson Marine shipyard constructing the ferries.

It said that more than two years after the Scottish Government took over control of the shipyard, significant operational failures still need to be fully resolved and further remedial work on the vessels continues to be uncovered.

The project to deliver Vessels 801 and 802 for the Clyde and Hebrides has been beset with delays and spiralling costs.

“The ferries are now almost four years late, with no certainty on when they will be complete,” said the report.

“The total cost of the project is currently estimated to be at least £240 million, around two and a half times the original contract price.

“These issues have frustrated island communities and weakened resilience across Scotland’s ferry network.

“Scottish ministers approved the contract award to Ferguson Marine Engineering Limited (FMEL) in October 2015, despite significant risks caused by FMEL’s inability to provide mandatory refund guarantees and the severe misgivings of Caledonian Maritime Assets Limited (CMAL).

“There is insufficient evidence to explain why Scottish ministers made this decision.

“As the project progressed, delays, costs, and a contract dispute between CMAL and FMEL, escalated.

“Despite CMAL and the Scottish Government intervening to support the project, FMEL entered administration in August 2019, with the Scottish Government bringing the shipyard into public ownership.”

Stephen Boyle, Auditor General for Scotland, said: “The failure to deliver these two ferries, on time and on budget, exposes a multitude of failings.

“A lack of transparent decision-making, a lack of project oversight, and no clear understanding of what significant sums of public money have achieved.

“And crucially, communities still don’t have the lifeline ferries they were promised years ago.

“The focus now must be on overcoming significant challenges at the shipyard and completing the vessels as quickly as possible.

“Thoughts must then turn to learning lessons to prevent a repeat of problems on future new vessel projects and other public sector infrastructure projects.”

Finance Secretary Kate Forbes responded by saying the decision to take Ferguson Marine into public ownership remains the correct one.

She said: “Not only did our efforts save the last commercial shipyard on the Clyde from closure, we directly rescued more than 300 jobs and ensured that the two vessels – which are vital for our island communities – will be delivered.

“There is no doubt that getting the vessels completed has been extremely challenging but let me be absolutely clear, these vessels must be delivered as soon as possible.

“There can be no ifs or buts when it comes to lifeline services for our island communities.

“I have made that expectation absolutely clear to the Ferguson Marine leadership and board, and we will continue to work closely with the yard to ensure the vessels enter service as soon as possible.

“The procurement process for vessels 801 and 802 was undertaken thoroughly, in good faith and following appropriate due diligence, and suggestions to the contrary are wrong.”

Liberal Democrat MSP Willie Rennie said: “This report places the blame for seven years of ferry failures squarely in the hands of SNP ministers.

“Island communities are being left all at sea by the failure to deliver new vessels. Their economies are suffering.

“Meanwhile, the taxpayer is shelling out four times as much as originally expected to get these vessels built.

“This is yet another example of the failed SNP industrial intervention policy.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.