Scottish ministers approve ferry contract despite warnings of ‘significant risks’ for taxpayers

Scottish ministers approved a disastrous contract for the construction of two ferries despite being warned that it posed “significant risks” to taxpayers, a condemning report has found.

An investigation by the watchdog for public spending revealed that the Scottish Government was unable to provide evidence as to why the decision was made.

Audit Scotland criticized a “many errors” in the delivery of two ferries to Scotland’s island routes, which are now almost four years late and will cost the public at least £ 240 million.

This is about two and a half times the original price of £ 97 million agreed in 2015 for the ferries, which are intended to serve the Clyde and the Hebrides, but which have been plagued by setbacks.

The Ferguson Marine yard in Port Glasgow was taken over by the government in 2019, but Audit Scotland said “significant operational errors” remained unresolved.

The report revealed that staff working on the ferries said the lack of effective planning meant they had been left standing still while usable materials were being scrapped.

It said that shortly after Ferguson Marine Engineering Limited (FMEL) was named as the preferred tender for the ferry contract in 2015, the Scottish Government was told that a full refund would not be offered if the project went wrong.

Despite being warned that the award of the contract would involve “significant risks” for taxpayers, ministers nevertheless pressed on – and were unable to provide evidence explaining why.

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Auditor General Stephen Boyle said: “The lack of delivery of these two ferries on time and budget reveals a wide range of shortcomings: lack of transparent decision-making, lack of project oversight and no clear understanding of what significant amounts of public money have achieved.

“It’s crucial that communities still do not have the lifeline ferries they were promised years ago.”

In February this year, the MSPs were told that the ships needed further remedial work as electrical cables that had originally been installed were not long enough.

Scottish Labor spokesman Neil Bibby said “the ultimate responsibility for this nifty failure lies entirely with the SNP government”.

“The first minister has been a constant presence throughout this failure,” he added. “[She] must finally take some responsibility for the mess her government has created and lay out a real plan for how they will stop the cost of spiraling. “

Finance Minister Kate Forbes denied that there had been any problems with the government’s approach to the original contract.

“The buyout process regarding [these] vessels were made thoroughly, in good faith and after appropriate due diligence, and suggestions to the contrary are wrong, ”she said.

“The decision to secure the future of Ferguson Marine was the right one. Not only did our efforts save the last commercial shipyard on Clyde from closure, we directly saved more than 300 jobs and ensured that the two vessels – which are crucial to our island community – will be Delivered.

“There is no doubt that it has been extremely challenging to get the ships completed, but let me be very clear, these ships need to be delivered as soon as possible.”

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