Ferguson shipyard misses out on new CalMac ferry order

The nationalised Ferguson shipyard has missed out on a crucial order for seven small electric ferries for west coast operator Caledonian MacBrayne.

Ferries procurement agency CMAL has instead named a Polish firm, Remontowa, as preferred bidder for the small vessels replacement programme (SVRP).

Ferguson's, the last commercial shipyard on the Clyde, had vowed to bid "aggressively" for the contract and had made it onto a shortlist of six bidders.

A total of £175m has been allocated to build the new "loch class" vessels and complete harbour and shore power upgrades. The first ferries are due to join the CalMac fleet in 2027.

The contract was a key part of Ferguson Marine's five-year business plan following delays and cost overruns in the construction of two much larger ferries for CalMac.

The 50m (164ft) ferries are similar to ones delivered successfully in the past by the Port Glasgow shipyard, and could have given it a pipeline of repeatable work lasting several years.

GMB convener Alex Logan said it was a blow to a workforce whose reputation had been dragged down by the "incompetence and miscalculation of others".

"They deserve better and this contract should have allowed the yard to seize back a reputation for excellence unfairly torn away," he said.

"The Scottish government is investing in the yard but what use is investment without contracts?

"We had a worldwide reputation for building small vessels and sending this work overseas makes no sense for the workers, for islanders or for the people of Scotland."

Scottish government-owned CMAL said the award to the Polish firm represented "best value" for the public purse.

But Scottish Labour said the government had failed to stand up for key Scottish industries, while the Scottish Conservatives claimed SNP mismanagement could prove to be the "death knell" for Ferguson's.

The Ferguson bid for the SVRP is understood to have ranked well for quality but missed out due to the difficulties in matching overseas yards on cost.

Chief financial officer David Dishon said: "We are very proud of our bid and although we priced it competitively, we were up against extremely tough competition from yards outside the UK which benefit from significantly reduced operating costs and advanced capital investment programmes.

"The weighting for price will therefore place all UK yards at a disadvantage. However, we were pleased to see Ferguson Marine's bid rated so highly on quality."

Remontowa has previously built the CalMac ferries MV Argyle, MV Bute and MV Finlaggan, and was runner up to Ferguson's when the contracts for MV Glen Sannox and MV Glen Rosa were awarded in 2015.

Price competition from the Gdansk-based firm was blamed for the decline of Ferguson Shipbuilders in the early 2000s - and in 2005 SNP politicians joined the yard's management in lodging a complaint with the European Commission about unfair subsidies.

Remontowa and the Polish government denied the claim.

CMAL chief executive Kevin Hobbs said the bids had been assessed against a range of technical and financial criteria, weighted 65% on quality and 35% on cost.

He said: "It is our responsibility to follow the Public Procurement Strategy for Scotland and appoint a yard capable of producing quality vessels which meet the needs of islanders, but that also deliver the best value for the public purse.

"We are confident in Remontowa's ability, and have worked with them before, most recently with the delivery of the MV Finlaggan in 2011."

There now follows a 10-day "standstill period" after which the contract will be signed.

The new ferries will operate on the Colintraive-Rhubodach (Bute); Lochaline-Fishnish (Mull); Tarbert (Loch Fyne)-Portavadie; Iona-Fionnphort (Mull); Sconser-Raasay; Tobermory-Kilchoan (Mull); and Tayinloan-Gigha routes.

They will have back-up diesel engines, and CMAL has warned they may have to operate on diesel initially because of challenges in upgrading the power grid.

Phase two of the programme will see the purchase of three more vessels which are capable of handling more challenging sea states, but that contract will go to tender separately.

Deputy First Minister Kate Forbes said she appreciated Ferguson's disappointment but said the firm's future did not rely solely on the small vessels contract.

She told BBC Radio Scotland's Drivetime: "The new business case is focusing on a number of different opportunities.

"To have secured the small vessels replacement programme would have been an added bonus but it is not core to their future plans."

She revealed the yard would be starting more sub-contracting work from BAE Systems in April and it was also bidding for other contracts.

Forbes said she hoped new investment would make the yard better placed to win phase two of the small vessels programme, and insisted it could have a viable future

Ferguson Marine had lobbied along with trade unions and local politicians for the publicly-funded small vessels replacement programme contract to be awarded to it directly.

But the Scottish government said it feared doing so might breach UK subsidy control laws, and the contract was put out to competitive tender.

Inverclyde's Labour MP Martin McCluskey disputed the claim that directly awarding the contract would have broken the law, and he accused the Scottish government of "prioritising opportunities in Poland rather than Port Glasgow".

"Ferguson's successfully built vessels similar to these in the past and could again," he said

"The contract award took no consideration of the social impact of not awarding these contracts to Port Glasgow - the same mistake cannot be made in the next round of the small vessels replacement programme.

"The workers in the yard deserve a break after years of being let down by the Scottish government and poor management."

Scottish Conservative transport spokesperson Sue Webber said: "It should be a given that a nationalised shipyard wins a Scottish government contract.

"Yet it's a measure of how badly the SNP have mismanaged Ferguson's that ferries which should be built on the west coast of Scotland are instead to be made in eastern Europe."

Ferguson's employs about 300 workers and apprentices in an area of high deprivation and has built six out of the 10 largest ships currently in CalMac's fleet.

But the firm has struggled with construction of MV Glen Sannox and MV Glen Rosa, the first dual-fuel ferries built in the UK capable of running on liquefied natural gas.

Design challenges, disputes over rising costs and an acrimonious stand-off with the customer CMAL saw the firm return to administration in 2019 when it was nationalised, with problems continuing under public ownership.

The recently-delivered Glen Sannox has been praised by ferry users on the Arran route but the ship was unexpectedly taken out of service on Friday after a hairline crack in a weld on its hull led to a small leak.

The fault was quickly repaired and the ship resumed sailings on Sunday.

The second ship MV Glen Rosa is in the final stages of construction with another delay expected when the next delivery update is given shortly.