Mccoll to lodge claim for ferry compensation next week
JIM Mccoll’s Ferguson Marine shipyard will lodge a compensation claim with Caledonian Maritime Assets before Christmas over cost over-runs on its contract to build two ferries.
Mr Mccoll also revealed he will hold talks with a Canadian shipyard which won a similar case against Quebec’s government.
Port Glasgow yard Ferguson has been at loggerheads with state-owned CMAL as design costs have spiralled on the dualfuel ferries, leading to significant delays in the vessels being delivered.
The contract with governmentowned CMAL, which leases ferries to operator Calmac, was originally valued at £97 million. But Ferguson, which Mr Mccoll runs through his Clyde Blowers Capital vehicle, argues that the cost of delivering the vessels has soared because of repeated design changes requested by CMAL.
The first of the two ferries, the Glen Sannox, is now scheduled to be delivered in the middle of next year, more than one year later than planned.
Mr Mccoll said the compensation bid will be launched next week following frustration at CMAL’S “point blank refusal to discuss the matter”.
Speaking exclusively to The Herald, Mr Mccoll did not put a precise value on the claim. However, he expects there “will at least be a 50% to 60% increase in the price” of the vessels.
Although the compensation bid will be lodged with CMAL, he said “it will be a legal claim”.
He added: “If they [CMAL] don’t want to discuss it, the next stage will be to go to court.”
Mr Mccoll, whose Clyde Blowers Capital acquired the Ferguson yard out of administration in 2014, said: “We are putting together a claim for the additional costs on the ferries. The additional costs are substantial and real. We need to be paid for it. We can’t have an organisation like CMAL burying their heads in the sand.”
Mr Mccoll believes Ferguson’s stance is strengthened by a similar case in Canada, where Davie Shipbuilding mounted a successful claim after costs over-ran on the building of “first in class” ferries. He said the Government of Quebec had initially priced the Canadian contract at C$125 million, before the price was ultimately re-set at C$300m.
Mr Mccoll said the similarities between the two cases are “uncanny” and revealed he will be meeting representatives of the Davie shipyard, and the person who led its claim, this weekend, “just to compare notes”.
Noting the vessels being built by Ferguson were broadly similar to their Canadian counterparts, Mr Mccoll said: “They had the same issues that we had. It was the first in class for North America, so they had to go through all the class issues for the North American market and they were dealing with
an organisation owned by the Quebec Government, very similar to CMAL. And they put in claims, as we did, and eventually they won their claim.
“The original quote was C$125m. What the Quebec Government had to pay at the end of the day was C$300m – 2.25 times [more]. And it is uncanny how similar it is. The way we are being treated [by CMAL] just now, just [being] dismissed, is quite frankly outrageous.”
Mr Mccoll added: “We will be submitting next week our claim for the additional costs that we are justifiably due.”
CMAL said in a statement: “Ferguson Marine Engineering Ltd (FMEL) is under contract to supply the design and build of the two dual fuel ferries. It is an industry standard design and build contract with a fixed price and defined delivery dates. FMEL entered into the contract with full
and prior knowledge of the specification and terms of the contract. CMAL fundamentally disagrees with any assertion that there have been significant design changes to the vessels. Minor changes have followed the contractual process and costs for these have been agreed with FMEL. These costs have been covered by a three per cent project contingency budget held by CMAL.”
Earlier this year Ferguson found itself at the centre of a row over a secret £15 million loan from the Scottish Government. Ministers were criticised by Audit Scotland in September over a loan it gave to Ferguson last year, after the yard had run into cash flow difficulties as work on the CMAL ferries fell behind schedule. It emerged that Finance Secretary Derek Mackay did not tell Holyrood’s finance committee about the loan until April, before ministers granted Ferguson a further loan of £30m.