Scottish ministers vow to press on with costly ferry project

Scottish ministers vow to press on with construction of island ferry despite it being five years behind schedule and costing FOUR TIMES the original £97million price tag – while admitting it would be cheaper to scrap it altogether and build a new one

• Work on ‘hull 802’ will continue despite it being cheaper to start from scratch
• Neil Gray said scrapping CalMac project would risk loss of yard and many jobs

Ministers have vowed to press on with a crisis-hit ferry project despite admitting it would be cheaper to scrap it and buy a new vessel.

Economy Secretary Neil Gray confirmed yesterday that work on the unfinished ship ‘hull 802’ would continue despite officials warning that it was no longer ‘value for money’.

He also acknowledged the shambolic bid to build two CalMac ferries at the nationalised Ferguson Marine shipyard on the Clyde was likely to see the cost to the taxpayer soar further.

Mr Gray insisted scrapping the ferry project would lead to the collapse of the yard, with the loss of hundreds of jobs. 

Neil Gray on the way to the chamber of the Scottish Parliament, on April 19 in Edinburgh 

SUNK COSTS: Ministers vow to press on with ferry building projects despite it being cheaper to start over. Pictured: One of two Caledonian Macbrayne ferries in Port Glasgow, 10 May 2022

It comes after civil servants warned him they could no longer have confidence that building the second ship was a good use of public funds.

It was the first time in 15 years that Scottish Government officials have had to ask for written authority from ministers to proceed with a project.

READ MORE: Like so many SNP policies, the ferry Glen Sannox is an embarrassing failure, says EDDIE BARNES

The cost of building the Glen Sannox and hull 802 ferries has risen to nearly four times the original £97million price tag, with the vessels now five years overdue.

Scottish Conservative transport spokesman Graham Simpson said: ‘What an utter, abject humiliation for the Cabinet Secretary to have to admit to parliament and the nation that – years down the line – it would be cheaper to start from scratch, than complete vessel 802.

‘Of course, that can’t and won’t happen – because our island communities have already been kept waiting years too long, and any further delays to the delivery of the jinxed vessels would heap betrayal upon betrayal.

‘It’s a shameful, scarcely believable indictment of SNP mismanagement that completing 802 does not represent value for money. The building of ferries 801 [Glen Sannox] and 802 at Ferguson Marine is a national scandal that continues to snowball before our eyes.

‘The very least islanders – and taxpayers – deserve is an admission from the Cabinet Secretary of what the final bill for 801 will be, and, in the case of 802, how much cheaper it would be to buy a new ferry, compared to finishing the one languishing in Port Glasgow.’

Liberal Democrat MSP Willie Rennie said: ‘We’ve had eight years of this utter fiasco in which the Government has soaked the taxpayer, has betrayed the islanders and has utterly humiliated the workers.

‘Yet, we’ve had six ministers in that time. Not one of them, including the current First Minister, has lost their job for this fiasco. Will anyone ever face the music for this disaster?’

In a statement to MSPs yesterday, Mr Gray announced he has had to provide ‘ministerial written authority’ asking officials to proceed with spending public money on hull 802.

A letter to Mr Gray from Gregor Irwin, the Scottish Government director-general for economy, said: ‘As Accountable Officer I am required under the PFA (Public Finance and Accountability) Act to assess the regularity, propriety and value for money of policies.

‘I am satisfied of the regularity and propriety of completing vessel 802 in line with the existing contract but the value for money case, in which I am required to be satisfied that resources are used economically, efficiently and effectively, is more challenging.

‘A comparison of projected costs from now until vessel completion with the alternative options, allied to risks driven by inflationary pressures and supply chain issues, combine to make it difficult for me to gain sufficient assurance that value for money, as determined by the PFA Act, can be achieved.’

In his statement yesterday, Mr Gray said officials had judged the cheapest way to complete the Glen Sannox was to continue the project at Ferguson shipyard.

But he added: ‘The case for vessel 802 is more challenging and I have accepted the judgment of the Accountable Officer that the narrow value-for-money case has not been made.

‘Having said that, I am guided by a wider set of considerations. It is also important that I consider the impact on Ferguson Marine.’

Mr Gray said procuring a new vessel would mean it could not be deployed until at least May 2027.

He added: ‘I remain committed to supporting a sustainable future for Ferguson. I believe confirming our intention to deliver vessel 802 at the yard provides a platform on which future success can be built. Put simply, if vessel 802 was not delivered then the future of the yard, and the hundreds of jobs it supports, would be in jeopardy.’

In March, a ‘section 22’ report by public spending watchdog Audit Scotland revealed the cost of the vessels remains ‘uncertain’, and estimated a sum of £293million.

When a £45million loan is taken into account, the total bill to taxpayers is £338million – compared to the original price of £97million

Mr Gray yesterday revealed the latest due diligence work ‘has identified a number of inflationary and other significant pressures that could increase the cost to complete’. Labour MSP Alex Rowley demanded an apology to islanders who have been ‘badly let down’, as well as to the people of Scotland for the ‘outrageous mismanagement of public funds’.

He added: ‘A string of SNP ministers have come and gone, but not one has ever been held accountable for this mess.’

The unfinished Glen Sannox Caledonian Macbrayne ferry in the Ferguson Marine shipyard in Port Glasgow, Inverclyde

The ferry contract was signed in 2015 when the yard was owned by businessman Jim McColl before administration hit, with Ferguson’s later nationalised in 2019.

The Glen Sannox is finally expected to enter service this autumn while it is hoped hull 802 will be ready by next December.

Ferguson Marine chief executive David Tydeman said: ‘Today’s announcement means we can push ahead with the delivery of the vessels this year and next.

‘I also acknowledge the Cabinet Secretary’s commitment to supporting the yard that will enable us to pursue further contracts.’

Asked to confirm details of the options for completing hull 802 and the estimated costs, a Scottish Government spokesman said: ‘The Accountable Officer has discussed this issue with the Auditor General and we will provide as much information as possible to parliament in the coming weeks.’ 

Source: Read Full Article