New board to oversee completion of Ferguson ferries

An order for CalMac ferries has been at the centre of a dispute

The Scottish government has set up a board to deal with the completion of two ferries being built at the now publicly-owned Ferguson shipyard.

It took control of the base in Port Glasgow on Friday after bosses at the yard served notice of intent to put the business into administration.

This would have left 300 jobs at risk.

Finance Secretary Derek Mackay said the new programme review board would try to secure the cheapest possible delivery of the CalMac ferries.

"We have always been clear that we want to complete the vessels, secure jobs and give the yard a future," he said.

"I have formed a programme review board to establish a new delivery programme to ensure the completion of the CMAL [Caledonian Maritime Assets Ltd] ferry contracts at the lowest possible cost to the taxpayer.

"While work continues at the yard, we are working to put in place a management team which will refocus all efforts on completing this vital government contract."

He added: "We are working closely with staff and the trades unions - as well as suppliers and customers - to achieve the best possible outcome for the yard."

A turnaround director had already been appointed to work to stabilise the business and support the recruitment of an incoming management team, including a chief executive officer.

The Scottish government will buy the yard if no private buyer is found within four weeks.

Finance Secretary Derek Mackay visited the Port Glasgow yard on Friday

Ferguson was involved in a dispute with the Scottish government over the construction of the two CalMac ferries.

The yard was owned by industrialist Jim McColl, who could not persuade ministers to pay more than the £97m contract price for the disputed ferries.

The agreement also means work on the CalMac ferries, and other contracts, can continue while efforts to find a commercial buyer get under way.

Administrator Deloitte described the ferry contract as being "materially behind schedule and over budget".

The monthly wage bill for workers at the yard will now be met from Scottish government funds.

From a bright future to a bitter dispute

A deal was struck to save the yard in 2014

When Ferguson Shipbuilders went bust in the summer of 2014 it seemed the last shipyard on the lower Clyde was heading for oblivion.

But within weeks a deal had been brokered for billionaire tycoon Jim McColl to save the Port Glasgow yard.

He was adamant that Scottish shipbuilding could have a bright future. The workforce at Ferguson Marine Engineering Ltd, as it became known, rose from about 70 to 350.

Early work came in the shape of a £97m Scottish government order for two new ferries for CalMac.

And that is where it all started to unravel.

CMAL, the company that owns and manages ferries and other assets on behalf of the Scottish government, was pushing Ferguson Marine hard to complete the ferries on time and on budget.

But Mr McColl was adamant CMAL had made repeated design changes, a claim denied by CMAL, and a bitter dispute ensued with Ferguson Marine last year revealing it expected to lose nearly £40m on the ferry deals.

The Scottish government has made two loans to Ferguson Marine, totalling £45m, and what happens to these, as well as when the ferries will eventually enter service, remains unclear.

• The lifeline ferry deal that went adrift