Bid controversy New report shows CMAL’s concerns over Ferguson Marine contract
THE owners of Scotland’s ageing lifeline ferry fleet have said they will no longer allow Scottish ministers to stop them from securing mandatory financial safeguards in procuring new vessels – after criticising the handling of the award of a ferry fiasco contract.
Caledonian Maritime Assets Limited ( CMAL), the Government-owned company which is also responsible for procuring ferries, has said that it was “effectively instructed” by ministers to award the contract for the two stricken lifeline ferries that are still languishing in a nownationalised Inverclyde shipyard to tycoon Jim McColl’s Ferguson Marine.
It said the process that led to a Scottish Government intervention that forced them to award the contract despite its serious concerns about a lack of mandatory financial safeguards was “not normal”.
‘Concerned’
IN a new analysis, CMAL said it had been concerned that it had been informed by the Scottish Government agency Transport Scotland that Ferguson Marine was even named as preferred bidder on August 31, 2015, two months before the final contracts were signed.
CMAL has told the public funds auditors that in future it will ensure that only shipbuilders that agree to provide a full builder’s refund guarantee can qualify as a preferred bidder “regardless of the views of Scottish ministers”.
Audit Scotland has previously criticised the Government for failing to provide an adequate paper trail around the decision to award the £ 96 million contract to the shipbuilding company headed by tycoon Jim McColl without the safeguards.
The Scottish Government has been accused by critics of forcing through the deal, despite the concerns of CMAL, for political reasons. The final signing of the fixedprice contract was announced in October 2015, two months after Ferguson Marine was announced as preferred bidder, to applause on the opening day of the SNP conference in Aberdeen.
Roy Brannen, pictured below, interim directorgeneral of the Scottish Government’s net zero department which oversees Transport Scotland, previously insisted that CMAL was not overruled by ministers and that the public company had been content to sign the contracts to Ferguson Marine.
CMAL has told a different story.
‘Problem’
IN a detailed position commentary, it said that 10 days before it was named preferred bidder on August 31, 2015, Ferguson Marine made it clear through its lawyers that guarantees were a problem.
And four days later it had requested a “letter of comfort” from Transport Scotland because of the risk of “insufficient guarantees” offered by Mr McColl’s firm.
CMAL has previously stated that it was not until September 2015, the month after being selected as preferred bidder, that Ferguson Marine had stated it could not provide the full builder’s refund guarantee.
CMAL says it was concerned that an announcement of the preferred bidder was being planned on August 31, 2015, “amid significant publicity at the Ferguson’s yard”, would “materially reduce their negotiating hand and at a time when negotiations were far from concluded”.
CMAL said: “CMAL made Transport Scotland aware of these concerns, including at the CMAL board meeting held at Victoria Quay on August 25, 2015. None of the non-executive CMAL board members attended the public announcement of the preferred bidder on August 31, 2015. The CMAL board had not taken the decision to award the contracts to [ Ferguson Marine] at that stage.
“It was clear to the CMAL board that Transport Scotland and the ministers wished the award of the contracts to be made to [ Ferguson Marine] and for the vessels to be built in Scotland.”
The Herald on Sunday previously revealed that ministers provided a £ 106m carrot to ensure the ferry contract could go through without the normal safeguards in the wake of CMAL concerns that it was being put at commercial risk if Ferguson Marine became insolvent or failed to deliver on the ships without the full refund guarantees.
Approval
A LETTER from John Nicholls, then director of aviation and maritime at the Scottish Government agency Transport Scotland, confirmed that ministers had sanctioned the approval of the award of the ferry contracts to Ferguson Marine.
“In this way, CMAL was effectively instructed to proceed with the purchase from [ Ferguson Marine] despite the concerns raised,” said CMAL.
“CMAL were not content with the final draft contracts. In these circumstances, the ministerial approval process was not normal.”
CMAL said it made no further recommendation to Transport Scotland or ministers and the contracts were signed.
While the ferries were first ordered in October 2015, they are now delayed by at least five years while costs have soared from £ 97m to at least £ 250m.
CMAL also said that after receiving bids from various shipyards, before the preferred bidder was announced, a tender evaluation was made. That made use of a confidential Pre- Qualification Questionnaire ( PQQ).
‘Not available’
CMAL said at this stage that Ferguson Marine had not indicated that the builder’s refund guarantee was not available.
The ferry company said if it had done so it would have materially affected its scoring in the evaluation or led to the rejection of its tender as non- compliant.
But evidence shows that the tycoon’s shipyard firm failed to fulfil mandatory requirements to qualify as the ferry fiasco contract bidder.
CMAL had previously insisted that Ferguson Marine had “satisfied all questions” on the PQQ.
But the firm that was
CMAL were not content with the final draft contracts. In these circumstances, the ministerial approval process was not normal