Ferry 'customer' CMAL discusses delays to the delivery of two new vessels
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Wasn't the obvious lack of space considered by CMAL before it awarded the contract, asks Peter Chapman.
The yard's plan was not to build the two ships side by side, that change was made after the contract was signed, replies Mr Anderson.
The convener briefly suspends the meeting.
Image source, bbcTory MSP Peter Chapman says FMEL said CMAL audited the shipyard annually and found it to be satisfactory.
"It wasn't a full quality audit at all," replies Mr Anderson.
He explains his audit is in the monthly report and is separate from that referred to by FMEL.
Mr Anderson says: "We started to flag up concerns in March 2016, that the ships would be late."
Image source, Andrew CowanJames Anderson says the plan was to build the 801 and 802 hulls in the shipyard, and the super structure was to be built at two other locations in the UK.
He reiterates that workers were basically just told to get on with it.
I find it incredible that we are even having this conversation about how these people behaved, he adds.
SNP MSP Angus MacDonald asks where the super structures were meant to be built and what did CMAL do when Ferguson decided to go against the originally plan.
As soon as it happened we wrote to them and asked for the new plans, warning it would not work and the shipyard did not have space for it replies Mr Anderson.
The yard continued to say, right up until July 2017, they had it under control he tells MSPs.
Then in July 2017 we went from nothing to "here's a claim" for £17m he adds.
This was a failure of management that were put in after the tender, Mr Anderson says.
He says systems were in place but they were not applied he adds and the plan disappeared.
They had the tools, they just didn't have the people who knew how to use them, insists the CMAL director of vessels.
Mr Anderson argues management failed to get the information out to the people on the vessel.
"Essentially this contract was awarded to a company that couldn't fulfill it," says Mr Rumbles.
Logically there has to be something wrong with how you examined capability, he argues, asking whether CMAL regrets recommending Ferguson.
Something went wrong after we signed the contract, replies Mr Anderson.
There was nothing wrong before you signed the contract, asks Mr Rumbles.
This shipyard had a good history of building ships and has 300 highly skilled people, the director of vessels says.
He insists CMAL did everything right and reiterates the shipyard management was at fault.
Mr Rumbles says the bid from Ferguson was £6m higher than CMAL budgeted for and asks why they approved it.
The budget was an estimate of the market at the time, it was set way before they went out to tender replies Mr Anderson.
"That's just life."
Mr Rumbles says the government's ferry unit says CalMac are pointing the finger at CMAL in terms of choosing Ferguson.
Mr Anderson refutes this saying the three organisations work really well together, but accepts CMAL are the procurement specialists.
The vessels director also accepts: "We make the final recommendation."
However its a joint exercise and there was a huge input from CalMac, he adds.
Lib Dem MSP Mike Rumbles says CMAL chose Ferguson because it had the most detailed concept design, but this design was produced by Houlder - the same company CMAL employed to draw up the tender in the first place.
Did alarm bells not ring for you there, the Lib Dem MSP asks.
There was a whole array of different specialist companies which but together the design, not just Houlder, replies Mr Anderson.
Houlder are a reputable worldwide company, he adds.
The director of vessels says that shipyard started to fail after the contract was signed, and it changed its strategy after CMAL had signed up to what Ferguson had promised.
Why was substandard steel used for the bow doors, asks SNP MSP Angus Macdonald.
Mr Anderson explains a lot of the drawings put out to the yard were not finalised or approved.
There's strict guidance for bulbous bows, he points out and says even the workforce were telling the shipyard "this isn't right".
Mr Anderson asks what were the workforce told, and replies they were told, "crack on"
He says the committee heard that the bulbous bow was not being fitted because it was ugly .
"Have you ever heard anything so ridiculous in your life?"
He points out the bulbous bow is under the waterline.
Mr Hobbs suggests a lot of the evidence MSPs have heard from others have been "disingenuous".
SNP MSP Maureen Watt says given CMAL owns the materials, why were the two sites the committee visited such a mess and why is there not proper documentation.
Mr Anderson suggests the material the committee saw belonged to the shipyard and by contract CMAL manages documentations "very well".
We have a better quality system than the shipyard, he argues.
Kevin Hobbs says the whole thing is an iterative process, with a preferred bidder chosen and then checks made that they can comply with everything they promised.
Mr Hobbs adds in terms of the surety bond and bank guarantees, "they actually did a a U-turn on that".
Ms Hamilton says FMEL had only just exited receivership when CMAL awarded them the contract and needed a £45m loan from the government.
She asks if CMAL's process for assessing financial capability is sufficiently robust.
Yes, replies Mr Hobbs, explaining that after discussions with the shipyard cashflow could be smoothed out without affecting the final price.
When all of the six compliant bids were looked at, they were broadly within a range, he adds.
"We were absolutely convinced that the shipyard could perform and they could build the ship for that amount of money."
He adds hindsight is a wonderful thing and effectively there were lots of mistakes made by the shipyard and they were effectively the "masters of their own demise".
Tory MSP Rachael Hamilton asks whether financial stability of bidders is taken into account.
The CMAL CEO says the preferred bidder was chosen by CMAL in August, after which discussions go ahead to verify all they have promised.
So basically it's a risk, asks Ms Hamilton.
"There is always a risk with any commercial transaction," Mr Hobbs replies.
Kevin Hobbs tells MSPs CMAL has to carry out due diligence on each and every shipyard that bids.
If we consider any yard to be unable we have to discount their bid, he adds.
After the risks around Ferguson were flagged by our chairman we negotiated in a different way to ensure we were comfortable with the bid Mr Hobbs explains.
CMAL took ownership of materials as they were delivered to the shipyard which filled the £60m risk, he says.
CMAL director of vessels says the bid was 2,000 pages
Mr Chapman says a big ship is more difficult to manoeuvre in high winds.
Mr Anderson points out smaller vessels are not as fuel efficient and if too small you would not want them.
He says for climate change and operational costs that would be huge.
The CMAL director of vessels says, in terms of the bid they accepted, the technical specifications they got were down to the level of do you get a four slice toaster.
The bid was 2,000 pages and well put together, he adds, saying he had never seen one as big.
SNP MSP Emma Harper says so the tender was not just accepted on cost, to which Mr Anderson agrees saying there is detailed scoring on quality and cost taken into account.
Image source, PA MediaThree 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.
That contract ended up dragging 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.
Mr Finnie asks how CMAL incorporated the views of island communities and ferry users in the specifications for the new ferries.
Mr Anderson explains a "big part" of what CMAL does before beginning any project is public engagement.
Reliability is a key ask from communities so we look for lots of redundancy of equipment in our ships he adds.
Peter Chapman says feedback MSPs hear from island communities is that CMAL consults and then ignores their views. He highlights many communities asked for two smaller vessels rather than one big one.
Mr Anderson says the ship being designed is "Hebrides plus", insisting: "We are delivering the ship that is required."
Image source, Getty ImagesThe cost of completing two delayed CalMac ferries has more than doubled, the Scottish government has revealed.
A row over the construction of two ferries under a £97m deal saw the Ferguson Marine yard in Inverclyde taken into public hands.
Now a new assessment of the vessels has revealed costs have soared and they will be delayed again.
The first ship, Glen Sannox, destined for the Arran route, will not be ready until the last three months of 2021.
The second vessel - known as Hull 802 which is earmarked for the Skye, Harris and North Uist route - will not be ready until July or August in 2022.
Image source, bbcCommittee convener Edward Mountain
Mr Mountain says Ferguson came in with a 30-month time period and he asks why did CMAL think they were the best value for ferries.
The committee convener says island communities were crying out for the ferries and Ferguson's timescale was longer than anyone else.
He says CMAL granted, in their own words, a "significant indulgence" to Ferguson.
Ferguson were evaluated for price and delivery, replies Mr Anderson.
Typically ferries would be around 24-27 months and Ferguson came in at 31 months, he says.
CMAL director of vessels James Anderson says the contract cost is the normal price for these types of vessels.
Mr Anderson says the expected time for completing the construction of the vessels would be 24 to 27 months.
Green MSP John Finnie asks if there was conversation with owners of similar vessels ahead of the contract.
Mr Anderson confirms they did speak to several owners and attended ferry conferences.
"We do a lot of research on any project before we embark on it."
He says they have been to Norway, Germany and Sweden for example.
Kicking off questions, SNP MSP Stewart Stevenson asks about the panel's experience of shipbuilding.
Kevin Hobbs says he has been involved in the shipping industry for 30 years, generally in the running of ferry companies.
Jim Anderson says he has been involved in ship design since 1981 and he is a chartered engineer.
Kevin Hobbs, the chief executive of Caledonian Marine Assets Limited (CMAL), and James Anderson, the firm's director of vessels, are giving evidence today.
CMAL is a Scottish Government-owned firm that procures ferries for use by operator CalMac.
Former Ferguson director Jim McColl has blamed CMAL for the delay and overspend during his appearance at the inquiry.
In a 41-page submission by CMAL, the procurement firm describes Mr McColl's assertion as "wholly false".