Amateurish, calamitous, profligate: The 4 dud deals that cost YOU dear
1 £1 AIRPORT BECAME MILLSTONE ROUND TAXPAYERS’ NECK
THE Scottish Government had high hopes for the future of Ayrshire’s Prestwick Airport when it snapped up the site for a token £1 in 2013.
Amid one of the most prominent state takeovers of a private company in Scotland, the aim was to save the airport, pull it up by its bootstraps and sell it back into the private sector when it had improved.
However, in the eight years since the SNP Government took control, the troubled airport has become a black hole for taxpayers’ money.
Despite being one of the busiest commercial airports in Scotland, earning millions from the US military in refuelling agreements, it has suffered significant difficulties since the buyout.
The Auditor General’s latest report shows it now owes the public purse £43.4 million in unpaid loans. Its interest bill alone stands at £6.3 million.
In 2020, a deal to sell the airport to an unnamed bidder fell apart owing to Covid pressures on the aviation industry.
In March this year, the Cabinet Secretary for Net Zero, Energy and Transport, Michael Matheson, said that a preferred bidder had been selected but that negotiations were still ongoing.
In their latest report, the auditors noted that the site remains on the market.
2 PRIDE OF THE CLYDE THAT’S SINKING FAST IN THEIR HANDS
AS one of the few remaining commercial shipyards in Scotland, the Ferguson Marine site in Port Glasgow held symbolic significance beyond simply providing local jobs for workers.
Yet its future is on the rocks following a botched takeover by the Scottish Government in 2019.
Ministers took control of the yard after a row over costs for two new hi-tech vessels which plunged the Clyde site into administration. By nationalising the site it was hoped the problems would be resolved and the ferries, named the 801 and the 802, would be finished.
Four years later, the ships have still not set sail, while the bill for their construction has reached almost £300 million – paid for by the public purse.
A Holyrood inquiry found that there were widespread failings in the handling of the yard and it called for a review into how ferries are bought.
Now, the Auditor General has announced he will carry out a financial audit of the project, with findings published by March 2022.
3 ‘GRAND GESTURE’ WITH CASH THAT’S NOT THEIRS
THE Scottish Government had been propping up Burntisland Fabrications for some time before it converted almost £40 million of loans into an equity share in the business in 2019. It was a grand gesture, but one that workers said did not go far enough.
The firm, which makes platforms for offshore wind turbines, blamed the Government for not providing enough backing to win work, but Ministers said they could not come up with any more cash for fear of breaching state aid rules.
Last year, concerns were raised that the yards were overlooked for key contracts to supply turbine ‘jackets’ to one of Scotland’s largest offshore wind farms. SSE Renewables went with companies in Asia and the Middle East instead.
BiFab, which has yards in Burntisland
and Methil in Fife, and one on the Isle of Lewis, later went into administration. In February, BiFab was sold for £850,000.
4 ‘ANOTHER B*LLS-UP’... AND IT MAY BE ILLEGAL
THE deal to help the Lochaber steel smelter has been described by opposition politicians as ‘another industrial intervention b*lls-up’.
Ministers bought the site from Tata Steel for £1 and sold it to Liberty Steel, owned by tycoon Sanjeev Gupta. Controversy surrounds the deal, because the Scottish Government may have broken state aid rules. It also drew criticism for giving Liberty Steel a £586 million power purchase guarantee.
The auditor revealed that the Government has upped its yearly guarantee provision from £37 million in 2019/20 to £161 million.