Gov­ern­ment to ‘pull out all the stops’ to save BiFab

Econ­omy Sec­re­tary claims it is in Scot­tish Gov­ern­ment’s in­ter­est to save com­pany

The Courier & Advertiser (Fife Edition) - - NEWS - craig smiTh csmith@the­

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 ad­min­is­tra­tion threat­ened 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 uber-com­pet­i­tive 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.

With both its main con­tracts tied in to Beatrice, BiFab has no other source of sig­nif­i­cant fi­nan­cial nour­ish­ment

Pic­ture: Tina Nor­ris

Up to 1,400 jobs are at risk at BiFab.

Pic­ture: Tina Nor­ris.

Big Busi­ness: gi­ant tur­bine foun­da­tions are be­ing built at BiFab in Fife for the Beatrice wind­farm.

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