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Peter Davidson

Scottish Government ministers 'squandered' £200m on nationalising shipyard

Scottish Government ministers have "squandered" £200 million of taxpayers' money on nationalising a shipyard firm at the centre of the current ferry fiasco, its former owner has claimed.

Jim McColl has written to the Holyrood committee probing the Glen Sannox and the as-yet unnamed hull 802 following Nicola Sturgeon's evidence earlier this month.

The two ferries are late in being completed and the potential cost could exceed £300m - three times the initial £97m contract. Audit Scotland has warned of a “multitude of failings” in the delivery of the two boats, which are still under construction at the publicly-owned Port Glasgow shipyard.

The First Minister expressed "deep regret" about the impact on island communities, however she also faced questions about the contract between Ferguson Marine and CMAL.

McColl claims the government rejected a call from Ferguson Marine Engineering Limited (FMEL) and Transport Scotland for an Independent Expert Determination to help with the costs. He says it could have saved £200m.

Writing to the committee, he said: "The Scottish Government's decision to reject Transport Scotland's proposal in early April 2018, and repeated requests from FMEL, for an Expert Determination process, unthinkingly defending CMAL, has resulted in public money being squandered on a reckless and foolish scale.

"It also forced FMEL into administration, a business that was well invested, with a healthy pipeline of work diversifying the business away from a dependence on Scottish Government ferry work."

FMEL managers accused the government after it fell into administration that it had no intention of leaving it in private ownership while warning nationalisation would subject them to EU state aid laws. Ferguson Marine was nationalised in 2019.

McColl wrote to the committee to say: "The Government have incurred over £200 million of costs since nationalising the yard and they are not finished yet. This need not have happened."

"Given senior counsel’s unequivocal opinion that the offer was legal I would have expected the government to take their own QC’s opinion. There is no evidence that they did.

"If the Government had received an independent opinion confirming it was legal, and accepted the proposal it would have saved at least £200 million of taxpayers money.

"The claim by the FM that the proposal was 'rigorously assessed needs to be probed and evidenced'."

Scottish Conservative Shadow Transport Minister Graham Simpson said Jim McColl's letter to the committee is a "damning indictment" of the government's handling of the situation.

He said: "Jim McColl’s claims that the SNP Government wasted £200 million and misled parliament about whether there was a fixed price contract are damning indictments of a government with its eye off the ball. It’s now up to the SNP to explain why they did not think an independent expert opinion was worth exploring.

"We already knew SNP mismanagement has needlessly cost the public hundreds of millions with no delivery, but these staggering revelations make it clear just how negligent they have been.

"Mr McColl says that the First Minister can have been in no doubt about the urgency of the situation when he approached her. We should immediately see the minutes of that meeting, to clear up this murky business.

"This also underlines yet again the need for a full independent public inquiry into the ferries scandal so that betrayed island communities and Scottish taxpayers get the answers they deserve."

A Scottish Government spokesman said: "The First Minister stands by the evidence, and the follow-up information requested by the committee will be provided in due course.

"The Scottish Government’s priorities have always been the completion of the two ferries, securing a future for the yard and its workforce, and supporting our island communities that rely on this type of vessel on a daily basis."

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