Scotland’s ongoing ferry fiasco: what you need to know

Ferries are a big issue in the west of Scotland. The approximately 45,000 inhabitants of the Hebrides depend on ferry services to deliver essential goods; taking people back and forth to jobs and doctor’s appointments on the mainland; and attracting tourists, their economic lifeblood.

A state owned company, CalMac – Caledonian MacBrayne – has a virtual monopoly on the Clyde and Hebrides network and provides ‘lifeline’ services to 22 of the larger islands. On an average day, its 34 ships complete 446 crossings, ranging from five minutes (to the Isle of Bute) to seven hours (Oban to Barra).

In recent years, however, the network has been plagued by cancellations and glitches. CalMac blames its “aging fleet”: Its ships average 24 years old; many of the largest are over 30 years old. And attempts to update them have embroiled the Scottish Government in a major scandal.

What is the scandal about?

The focus is on a botched procurement process. In the summer of 2014, the last shipyard on the Lower Clyde, Ferguson Shipbuilders, went bankrupt. It seemed to have been forgotten until August of that year when industrialist Jim McColl, then a staunch supporter of Scottish independence, stepped in to save it in a deal brokered by then First Minister Alex Salmond. Clyde shipbuilding is an emotional issue and that was just before the independence referendum when the SNP promised “the reindustrialisation of Scotland”.

A year later, Ferguson shipyard received a major boost when it was awarded a £97m contract by the SNP government to build the two new ships CalMac needed (and still needs) to service two aging ferries replace: the first which served the Isle of Arran route, the second, the ‘Uig Triangle’ of Skye, North Uist and Harris.

What went wrong?

Much. Hull 801 and Hull 802, as they were called, should be delivered in mid-2018. But the former, now named Glen Sannox, will be ready in spring 2023 at the earliest; Hull 802 has just been fitted with the bow. The cost to date is £240m, two and a half times the original budget. At industry prices, that should have been enough to replace much of the CalMac fleet. And the taxpayer foots the bill.

Normally, cost overruns would be covered by the manufacturer: one of the key requirements for the CalMac contract was a “builder’s money back guarantee,” giving the buyer full protection. However, the shipyard Ferguson Marine Engineering Limited could not give such a guarantee in this case. But despite concerns from Caledonian Marine Assets Ltd (CMAL) – the public body that owns CalMac – Scottish ministers signed it anyway.

What caused the long delay?

The ferries were built in a hybrid design and operated with marine diesel oil and liquefied natural gas – a first for a British shipyard. The technology was used elsewhere in the world, but the Ferguson shipyard ran into trouble. Within a year, CMAL reported serious technical and quality concerns.

In 2017 the Glen Sannox was “launched” at a ceremony attended by First Minister Nicola Sturgeon. But it was actually far from finished: the bridge had fake windows painted on it; most of the interior was not yet finished; and soon after, his “bulge” bug was found to be defective and needed to be replaced.

In 2019, CMAL reported that “no more than six people were working on 801 at any one time, and no more than two people were working on 802.” Ferguson denies this, but shortly afterwards the yard went bust with debts of more than £70m – including £50m to taxpayers – and was nationalized by the Scottish Government, who lent her a further £45m.

Who’s to blame?

CMAL blamed the Ferguson shipyard for missing every “milestone” date in the contract, except for the date when the first cutting of the steel took place. Ferguson, in turn, accuses CMAL of interfering in his work and moving the goalposts to specifications. McColl, Ferguson’s former boss, claims his firm was forced to operate on a “purely political timetable”: that the SNP wanted to announce good news at its convention and rushed through the contract without normal safeguards.

A report by Audit Scotland published in March identified the lack of a full refund guarantee as a fundamental problem. It found that given CMAL’s warnings, there was “insufficient documentary evidence to explain why Scottish ministers accepted the risks”.

What does the SNP say?

Sturgeon says she takes full responsibility, but the one who signed the contract was actually former junior Secretary of Transport Derek Mackay, who resigned in 2020 over reports of sending inappropriate texts to a teenager. Mackay says he’s been made a scapegoat and wants to “set the record straight.”

Can the problem be solved?

There is still no confirmed launch date for the two new ferries and as late as January there were still 175 outstanding technical, safety or quality concerns that needed to be resolved. McColl has suggested that it would be cheaper to scrap the second ship, Hull 802, and start over.

Many commentators argue that island communities would be better served anyway with a greater number of smaller, cheaper, and more efficient vessels, such as the catamarans that the unsubsidized, privately run Pentland Ferries have been using for years for their service to and from the Orkney Islands (CalMac a subsidy of £120-150 million in a normal year).

In the meantime, CalMac scours the world for used ferries. And in March a Turkish company, Cemre Marin Endustri, was awarded a £105m contract to build two new CalMac ferries for Islay. The Ferguson shipyard was not shortlisted.

https://www.theweek.co.uk/business/956731/scotland-ongoing-ferry-fiasco-explained Scotland’s ongoing ferry fiasco: what you need to know

Fry Electronics Team

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