MSPs embark on inquiry into ferry procurement

20.12.2019

The Scottish Parliament’s Rural Economy and Connectivity (REC) Committee has launched an inquiry into the ferry procurement and construction process following the collapse and subsequent nationalisation of Ferguson Marine Engineering Ltd (FMEL).

The inquiry will look to identify and address challenges and opportunities in the procurement of new vessels to support Scotland’s ferries network, including the impact of the United Kingdom’s departure from the European Union on the future award of new ferry construction contracts.

 Areas the inquiry is expected to focus on include:

  • the updated costs and timetable for the completion of two new hybrid ferries to serve the Clyde and Hebrides ferries network;
  • the Scottish Government’s decision to take public ownership of FMEL;
  • potential implications for future procurement of maritime vessels and for the ongoing development of the Scottish Government’s Ferries Plan and Vessel Replacement Programme.

Committee Convener Edward Mountain MSP said:

“Repeated delays to the planned schedule for delivery by Ferguson Marine of the two new hybrid ferries have been further complicated by the company’s entry into administration and the Scottish Government’s subsequent decision to assume public ownership of the Inverclyde shipyard.

 “These developments clearly have important implications not only for the completion of the two vessels, but also for future plans for the replacement and refurbishment of vessels to meet the ongoing needs of the Clyde and Hebrides ferries network more generally.

“The Committee wants to find out not only what has gone wrong and how things will be put right, but how these problems can be avoided in the future. We need to make sure that the relevant lessons from this saga are learned for the procurement and construction of new ferries in future.”

The committee invites all interested individuals and organisations to submit written evidence on its inquiry. Responses to the call for evidence should be submitted by no later than 7 February 2020.

Background

CMAL (Caledonian Maritime Assets Ltd) placed orders for two new ferries with Ferguson Marine Engineering Ltd (FMEL) in October 2015. The ferries are being delivered on a fixed-price basis under a design and build contract, with a combined fixed-price of £97m. The vessels are powered by hybrid marine gas oil/Liquid Natural Gas-powered engines, which are a world first for sea-going passenger and vehicle roll-on roll-off ferries.

The first ferry, MV Glen Sannox (vessel 801) was due to be delivered in summer 2018, with the second ferry (vessel 802) slightly later.

The Minister for Transport and the Islands wrote to the Committee on 9 November 2017, highlighting a delay in the delivery of the ferries with vessel 801 delayed until Winter 2018/19 and vessel 802 some time later. 

The Cabinet Secretary wrote again to the Committee on 16 August 2018 to advise that “…the first vessel, the MV Glen Sannox, will be delivered during Summer 2019 and the second vessel in Spring 2020”.

The Minister for Energy, Connectivity and the Islands, wrote to the Committee on 25 April 2019 advising that he anticipated a further delay to the delivery of both vessels.

The directors of FMEL filed a notice of intention to appoint administrators on 8 August 2019, effectively starting the process which would place the business in administration.

On 2 December 2019, the Scottish Government confirmed that it had taken the Ferguson Marine shipyard into public ownership following the rejection by administrators of three commercial bids for the company.

On 18 December 2019, the Scottish Government published the Ferguson Marine Programme Review Board report, which indicated a delivery range for vessel 801 of October to December 2021 and a delivery range of July to October 2022 for vessel 802, with an estimated outstanding cost for delivery of the two ferries of £110.3m.

 

 

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