Image source, Andrew Cowan

The crux of the issue seems to be that the shipyard was trying to build ships without a complete design and even now that design is not complete, says Tory MSP Peter Chapman.

How did this happen and what do we do now, he asks.

Mr Hair agrees the ships were commenced before the design was completed and tells the committee the plan now is to go through the design from scratch to get it signed off.

Any work being down at the moment is largely rework, with only a small amount of new work, he adds.

Mr Logan says when the work stopped on the two vessels because they could not agree on the design and workforce morale was badly affected.

It didn't help when agency workers were brought in, he explains, as skilled workers could not access the machines they required.

It was a question of pick up a brush and sweep up, he tells the committee.

Mr Greene wonders if it was the view of the workforce that it would have been better to build the two ships separately, one after the other, rather than together.

Alex Logan confirms it was the view but the management team at the time said it "did not like the negativity".

Mr Greene says the default assumption is it was fault of the previous management team.

"The situation is as I described it, the previous management team will have to answer those questions," replies Mr Hair.

Mr Logan says there were a difficult two years between the workforce and management that led to having to go to ACAS.

He says it came to a point where CMAL and the management team couldn't sit in the same building so it just came to a complete standstill.

The workforce started to worry about their jobs again as there were no other contracts on the horizon, he explains.

Tory MSP Jamie Greene asks whether it is Mr Hair's view that 100% of the blame is on the former management of Ferguson Marine.

Mr Hair says his executive summary does not seek to apportion blame.

"Well it does," replies Mr Greene, asking whose fault the problems are.

Mr Hair says MSPs would have to ask previous management about the process, responsibilities and decisions resulting in these problems.

The change register that applied to the design process "was a mess", says the turnaround director.

Mr Hair points out some changes were properly recorded, but many were not, with some drawings recorded but many not.

The changes to the detailed design process were very much lacking in detail, he adds.

Image source, PA Media

Four years late and £100m over budget. The deal to build two new CalMac ferries for Arran and the Hebrides has run into serious trouble.

Back in 2015, the £97m order was seen as a lifeline for Ferguson shipyard in Port Glasgow - the last commercial yard on the Clyde which had been rescued by industrialist Jim McColl the previous year.

Four years later that contract has dragged the yard back into administration. The yard has been nationalised and the final cost of building the ferries will be at least double the original estimate.

So what's gone wrong? You'll get very different answers to that question, depending on who you're talking to.

Read more.

SNP MSP Stewart Stevenson says the lack of any record of defects is a big warning flag.

Were the normal administrative processes in place to ensure senior management received proper reports, he asks.

Tim Hair says there was no planning process in place to do what Mr Stevenson describes, nor was there any real prospect of creating one due to the skills of the workforce.

"I was frankly surprised those systems were either absent or badly flawed," he adds.

He explains his first appointment was a highly skilled programme manager to deal with there weaknesses.

Mr Finnie asks if the concerns raised by the workforce were recorded anywhere.

Probably not, replies Mr Logan.

He points out management just said do what we tell you or you won't be here.

Mr Finnie asks what was different with this contract from previous ones Ferguson Marine has delivered on.

The biggest different was that the three vessels delivered previously were small, replies Alex Logan.

But also the designs of these were signed off in advance so the workforce was able to move forward, he adds.

This contract came to a standstill when CMAL and FMEL came to loggerheads over the design, he tells the committee.

"It was just kind of a stand off at the OK Corral who was going to cave in first."

Mr Mountain asks if CMAL and FMEL and this parliament should not have been aware there were problems with the design earlier.

The turnaround director replies he would have expected the basic design elements to have been signed off in the first six to nine months of the contract.

Green MSP John Finnie wonders if there was anything specific about these vessels relating to design, engineering or other requirements, particularly with regard to the duel fuel system, which resulted in delay.

Tim Hair provides some detail about how ferries are designed, before stating changes made to the design after the contract was signed totalled £1.5m.

The vessels are "significantly less than half built" as they stand now, he says.

"I just find this absolutely incredible, you know, you've got a hull in the water," says Mr Chapman.

"How the heck do you get to £110m, which is more than what the original cost was to start from scratch with a pile of steel and nothing?"

Mr Hair understands the concern but adds the process of establishing the cost going forward has been as rigorous and detailed as possible.

Tory MSP Peter Chapman says the agreed price for the two vessels was originally £97m, one of which is now in the water and another is half built.

It now seems it will cost another £110m, he says, and asks why it is costing so much more to finish given they are partially built.

Mr Hair replies that though the one in the water looks complete, it is a long way off from this.

The figure was arrived at by a detailed examination of the two vessels and include any re-work that needs to be done and the cost of running the yard, he tells MSPs.

I'm confident we can deliver the two vessels with that amount he says.

Surely as the turnaround director what has happened in the past must be looked at to ensure mistakes are not repeated, asks Mr Rumbles.

Mr Hair says he has never found holding a post-mortem on how decisions were taken that created shortcomings has added a great deal.

"I find it better to examine where the current processes fail and put steps in place to correct them."

SNP MSP Stewart Stevenson asks if it was a fixed-price contract for CMAL (Caledonian Maritime Assets).

Tim Hair confirms it is a fixed-price design and build contract, so CMAL expected to pay the contract value plus any negotiated variations.

I assume Ferguson Marine expected to make a profit though I have not examined the accounts from four years ago, he adds.

Bosses at Ferguson shipyard were to blame for the delay and spiralling cost of two new CalMac ferries, according to the chief executive of the government agency which placed the orders.

Kevin Hobbs, of CMAL, also rejected calls for the unfinished ferries to be scrapped and the work started again.

The vessels are £100m over budget and likely to be three years overdue.

Read more.

Mr Mountain says the decision to carry on with the two vessels instead of starting from scratch is based on a bit of a "guestimate" and he asks if that is sufficient in terms of the taxpayer.

Mr Hair replies the decision had to be made early on on which route would be best to deliver the ferries.

Alex Logan points out soft ground at the yard meant it was not sustainable to build both ferries side by side.

The FMEL Programme Review Board member says one of the ferries is now in the water and once a design is given we can move on.

Labour MSP Colin Smyth wonders if the budget was adequate from the beginning.

Tim Hair says the yard has the ability to build the ships and it seems this contract was comparable with others.

Convener Edward Mountain suggests Ferguson Marine should now be looking at the cost of starting again from scratch and says he finds it "quite confusing" that this is not the case.

Mr Hair confirms that the option of scrapping and re-starting was looked at but the decision was made based on the timescale.

Our conclusion was that the cost would not be massively different from taking the construction forward from where the vessels are now, he adds.

Mr Rumbles asks about the main drivers behind the increased costs and delays.

Alex Logan replies the design concept was never agreed from the outset and there are still design problems.

Were you surprised Ferguson Marine were awarded the contract in the first place, asks the Lib Dem MSP.

No because Fergusons has a history of delivering ferries on time and on budget, replies Mr Logan.

Tory MSP Jamie Greene says it sounds as if CMAL were encouraged the contract could be delivered but there were reservations in the workforce if it was achievable.

Mr Logan says there were constant changes being given to the workforce and no clear concept of a final design.