Government to ‘pull out all the stops’ to save BiFab
Economy Secretary claims it is in Scottish Government’s interest to save company
The Scottish Government has pledged to “pull out all the stops” to secure a future for BiFab and its workforce.
Up to 1,400 jobs are on the line at the engineering company’s yards in Methil, Burntisland and Arnish, with unions and management locked in talks yesterday as efforts to stave off administration continue.
While “disputed payments” between parties in the private sector have been blamed for the situation, Economy Secretary Keith Brown said it was in the Scottish Government’s interests to try to ensure a positive outcome.
Responding to a question from Kirkcaldy MSP David Torrance, Mr Brown said: “Discussions are ongoing with the Scottish Government, Scottish Enterprise and the company and this government is fully exploring all options available to save the company and the jobs which depend on it. The Scottish Government and Scottish Enterprise are continuing these discussions and we’re encouraging all parties to work constructively to find a solution.
“I do appreciate that this is a very concerning time for the workforce, but this government is committed to doing everything we can to find a positive solution to this situation.”
Unions have claimed the engineering firm’s financial difficulties are a result of the main Dutch-owned contractor, Seaway Heavy Lifting (SHL), not paying the company for contract work already completed, with Unite Scottish secretary Pat Rafferty saying BiFab was being “held to ransom”.
Green MSP Mark Ruskell urged ministers to provide assistance to the renewable energy company in taking up SHL’s offer “to support BiFab’s workforce” and include dialogue with the Dutch government.
“It’s not in the renewable industry sector’s interest for BiFab to go into administration,” he said.
Mr Brown said there were no immediate plans for any discussions with the Dutch government, but acknowledged SHL was “central to the contract” itself.
“There has been some movement in terms of the willingness of different partners to try and come to a solution,” Mr Brown added.
Mid Scotland and Fife Labour MSP Claire Baker and Tory counterpart Alexander Stewart both suggested delays in payments had contributed to BiFab’s problems, but Mr Brown said it was more a case of “disputed” payments.
SNP Mid Fife and Glenrothes MSP Jenny Gilruth asked if consideration had been given to setting up a taskforce in response to the current situation.
Mr Brown replied: “I think at this stage our focus is on making sure the company stays viable and the jobs stay in place and we have all the resources and the different parties available to do that.”
A spokesman from SHL said the firm welcomed the intervention of the Scottish Government and was working extremely hard to find ways of supporting BiFab.
“We remain supportive of a rescue package that is endorsed by and involves all stakeholders,” he added.
“SHL has always been keen to support BiFab’s workforce but we need a longterm plan from BiFab to ensure financial stability and project completion.”
All hands to the pump. That was the rallying cry at administrationthreatened Fife heavy engineer BiFab on Monday as the workforce appraised their options in the face of almost certain calamity.
Their admirable response was to stand firm and offer to work without guarantee of pay.
They are hoping their gesture will give management the breathing space they need to find a way to escape the financial black hole they are staring into.
I hope for the sake of them and their families that it works.
BiFab’s woes – at least in part – seem to stem from a breakdown in its relationship with Seaway Heavy Lifting (SHL), a specialist offshore contractor that is part of the Luxembourg-based Subsea 7 group.
SHL is the principal contractor on the £2.6 billion Beatrice windfarm in the Outer Moray Firth. BiFab is a subcontractor on the project, brought in to build the subsea foundations that ensure the turbines can stand tall against the elements.
The pair are now at loggerheads and it is easy to see who has the upper hand. In effect, SHL is the parent here and BiFab the child.
With both its main contracts tied in to Beatrice, BiFab has no other source of significant financial nourishment available to it right now other than through SHL.
A breakthrough in negotiations between the two companies is needed.
But, with the clock ticking inexorably towards full administration proceedings and SHL citing production problems and cost overruns at the Fife yard, I suspect some tough choices will have to be made if BiFab is to survive the next few days.
But the problems facing BiFab are multi-faceted and it may be that a sticking-plaster solution to get through the current crisis – if such a thing can indeed be found – may not, ultimately, be enough to keep the wolves from the door.
That is because there is a wider issue at play here in which oil and gas and renewables subcontractors often find themselves in the precarious position of having all their eggs in one basket.
The energy sector is ubercompetitive
With both its main contracts tied in to Beatrice, BiFab has no other source of significant financial nourishment
and there is only a certain amount of work to go around.
That means tier-two and tier-three contractors don’t have the luxury of a diversified order base on which to rest their laurels.
Investment in the North Sea is only now showing tentative signs of recovery after the oil price crash of more than two years ago, and the market and margins will remain tough for some time to come.
And, other than Beatrice, the offshore renewables sector has yet to gather a real head of steam in Scotland.
The fact that bird protection charity RSPB Scotland has now lost its legal bid to overturn permissions for the massive Neart Na Gaoithe, Inch Cape and Seagreen windfarms in the outer firths of Tay and Forth is positive in the context of building a strong and sustainable supply chain.
But it is not a panacea.
The Scottish and UK governments have a duty here to ensure the economic environment is such that investment decisions over new developments in Scottish waters can be made more quickly and easily.
The needs of our heavy industries must be taken seriously, and a robust strategy developed and acted upon to ensure companies can plan for a future that is more than the very short-term.
Otherwise, BiFab won’t be alone in facing such troubled times.
Up to 1,400 jobs are at risk at BiFab.
Big Business: giant turbine foundations are being built at BiFab in Fife for the Beatrice windfarm.