‘Catastrophic failures’ that saw cost of ferries double

A ‘CATASTROPHIC failure’ of management l ed to a major Scottish Government ferries project doubling i n cost, a damning report has found.

The entire venture and all of the main players involved in delivering the deal to build two new CalMac vessels stumbled at every hurdle, according to the document.

The report condemned the Scottish Government’s part in the process and criticised its ferries quango for failings in overseeing the contract at the Ferguson Marine shipyard on the Clyde.

The findings, published following a year-long inquiry by a powerful Holyrood committee, also criticise the former operators of the yard in Port Glasgow, Renfrewshire, for failing to manage the design process effectively.

The cost of the ferry project increased from £97million to nearly £200million after a row between the yard’s operator, Ferguson Marine Engineering Limited (FMEL), and the quango Caledonian Maritime Assets Limited (CMAL). It led to the yard entering administration and being nationalised.

Holyrood’s connectivity committee found there had been ‘a catastrophic failure in the management of the procurement of vessels 801 and 802’.

Its 129-page report, published today, calls on Audit Scotland to launch a review into the ‘financial management of the contract by CMAL and the role of Transport Scotland’.

The findings condemn the ‘complete lack of transparency’ over the way £45million worth of loans were handed to FMEL by the Scottish Government, and the lack of scrutiny of how the money was used. The crossparty committee also called for a ‘ root and branch overhaul’ of the way ferries are procured in the future.

Committee chairman Sir Edward Mountain said: ‘The evidence to our inquiry into this fiasco has revealed that all parties involved must share in the responsibility for the catastrophic failure to deliver this contract on time or on budget.

‘A lack of due diligence, poor project management, and a failure by all parties to take the necessary action to resolve problems as they emerged means the cost of the contract has increased from £97million to almost £200million, while the island communities who are relying on these ferries to be delivered continue to suffer.

‘Our report calls on the Scottish Government to commission an independent external review of the processes for public procurement of ferries to ensure lessons are learned.

‘The review should consider the robustness of financial due diligence, the processes for assessing the technical capabilities of bidders, and the design development and sign-off procedures, investigating precisely how such a situation could have arisen and to ensure such errors are never r epeated.’ The c ommittee s t ates i t was ‘appalled’ about how CMAL was legally bound to keep making payments on the contract despite ongoing concerns about FMEL’s performance.

Scottish Tory t r ansport spokesman Graham Simpson said the ‘damning report’ showed how ‘there was lax to non-existent scrutiny’, adding: ‘Nobody has yet taken responsibility for this fiasco.’

A CMAL spokesman said: ‘We will examine the content of the report as a matter of priority and give the recommendations our full consideration.

‘The problems with the dual fuel ferry project were driven by supplier failure.’

‘Complete lack of transparency’