Shipyard ‘too small to construct new ferries side by side’
Inquiry is told 95% of design still to be agreed five years after deal struck
A DISASTROUS contract for two Calmac ferries that could cost taxpayers £250 million was awarded to a yard without the space to build them together, MSPS have heard.
There was not enough room on the slipway to construct the vessels side by side, and not enough space to get a mobile crane between them for vital work, it was claimed.
When workers warned managers about the problem they were criticised for “negativity”.
The jaw-dropping claims were made on the opening day of a Holyrood inquiry into the fiasco at the recently nationalised Ferguson Marine yard in Port Glasgow.
MSPS also heard the ferries were “significantly less than half-built” and that 95 per cent of the design had yet to be agreed five years after a deal was signed to build them.
A paralysing financial dispute between the yard and the public body buying the vessels was likened to a “stand-off at the OK Corral”.
The boats – one destined for the Arran route, the second for the Skye, Harris and North Uist triangle – are currently running four years late and at double their original budget.
The last commercial yard on the Clyde, Ferguson Marine was bought by engineering tycoon Jim Mccoll’s Clyde Blowers empire in 2014.
The next year it won a high-profile £97m contract to build two dual-fuel ferries for Caledonian Asset Management Limited (CMAL), the state-owned body behind Calmac.
However bitter disagreements over design changes led to a breakdown in relations until the two sides could not “sit in the same building”.
With work at a standstill, and CMAL refusing to pay extra for the changes, Ferguson Marine’s finances deteriorated and it went into administration last August.
Unable to find a commercial buyer, the Scottish Government nationalised the yard in December to ensure the completion of the boats
and to safeguard 350 jobs. Finance Secretary Derek Mackay, who blamed the “disastrous” previous management for the problems, also installed “turnaround director” Tim
Hair to get the project back on track.
Mr Hair calculated that finishing the ferries would cost another £110m, on top of £83m already paid to Ferguson’s.
The Scottish Government has also written off £50m in loans to the yard.
Mr Hair said there had been a lack of project management on the contract, with no single person understanding it all, work done out of sequence, inadequate stock-taking and storage, and poor upkeep of the partly-built hulls.
Mr Mccoll has refuted the criticism, and blamed CMAL for the problems.
Holyrood’s rural economy and connectivity committee yesterday began its inquiry into what went wrong.
Alex Logan, GMB convener at Ferguson’s, said the yard, which is constrained on one side by historic Newark Castle, was not big enough to build the ferries side-by-side.
He said: “You’ve got a concrete slipyard. It can take one big vessel and possibly a small vessel. But in my opinion, we could not facilitate to build two vessels that size so close together because the ground wasn’t sufficient enough.”
He said there was a plan, which he called “fine in concept”, to build one hull on the slipway then launch it to make way for the completion of a second partlybuilt hull, but it didn’t work.
The hulls were called 801 and 802. Mr Logan went on: “We started the 802 hull and it was moved to the side towards the castle side, and it was all kind of soft ground.
“If you started putting hundreds of tons of units on that then it’s going to sink. It wasn’t sustainable to do that.
“For the build schedule we had, we couldn’t have done it because it would come to a complete standstill on 802 while 801 was prepared for launch.”
He claimed said staff concerns had been dismissed by managers.
He said: “It’s plain to see – the size of the vessels that they were building, and the breadth of them on the berth, that the two vessels weren’t going to [fit].
“We needed a mobile crane to go down in between them, and the space as you started building the two together, there wasn’t enough space.”
Asked if the workforce had warned managers about the looming problem, Mr Logan said: “The management team said they didn’t like our negativity.”
He also said managers caused problems by hiring agency workers to cope with the contract who arrived earlier on site than full-time staff and commandeered vital machinery.
He said that left skilled welders with little work bar sweeping up.
Mr Logan said design changes had been made “constantly” and there was still not a finalised design for the boats.
Without it, the work was “like building a jigsaw when you’ve got missing parts. You’re never going to complete it”.
Mr Logan said CMAL and Ferguson managers “came to loggerheads”.
He said: “They wouldn’t agree on the design so we couldn’t move forward, so it just came to a standstill. It was just a stand-off at the OK Corral. Who was going to cave in first?”
He added: “It came to a situation that CMAL and our own management team couldn’t sit in the same building.
“That started affecting the workforce, because the work stopped on the vessels.”
Mr Hair said the vessels were
“significantly less than half-built”, and 95% of the ships’ design had not been agreed with CMAL, but that more naval architects and marine engineers had been hired to do this job.
He said aspects of the design change process were a “mess”, compounded by the breakdown in relations.
“There were some changes that were agreed but were not signed off because the relationship had broken down to the extent that they were unable to sit in the room,” he said.
He told sceptical MSPS it would cost £110m to finish the vessels, as they were “much further away from completion than they look from a distance”.
Even the one ferry in the water was “still a very long way off completion”.
The cost of scrapping the ships and starting over again would not be “dramatically different” from the £110m bill for completing the hulls, but would take more time, he explained.
Tory committee member Peter Chapman said: “How the heck do you get to £110m, which is more than what the original cost was to start from scratch with a pile of steel and nothing?”
Libdem MSP Mike Rumbles said: “The Scottish Government need to come clean on what due diligence was done before a contract worth tens of millions was dished out.”
The SNP tried to distract from the criticism by criticising the committee’s Tory chair Edward Mountain for asking if Hyundai in South Korea could have built the vessels quicker instead.
Mr Hair said they indeed could have done it in under five years.
Inverclyde SNP MSP Stuart Mcmillan said: “The Tories have presided over decades of decline in Clyde shipbuilding. The SNP stepped in and saved Ferguson’s, but the Tories would rather give those contracts to South Korea.
“Edward Mountain should reflect on just how unwise and insulting his remarks were and apologise to the workforce at Ferguson’s.”
CMAL and our own management team couldn’t sit in the same building