Delayed ferries could cost taxpayer £250m when complete

The two vessels were to be built by Ferguson Marine and operated by CalMac - coming into use in 2018.

Ferries due to be finished construction almost two years ago could cost the taxpayer £250m when complete, a Holyrood committee has heard.

The two vessels, 801 and 802, were to be built by the Port Glasgow shipyard Ferguson Marine and operated by CalMac – coming into use in 2018.

However, delays which former finance secretary Derek Mackay attributed to “mismanagement” at the yard have pushed the dates back.

Following the shipyard’s collapse into administration – and subsequent rescue by Scottish ministers in August last year – the extent of the problems became clearer, leading Mackay to call for the inquiry to be set up at the Rural Economy and Connectivity Committee.

Speaking at an evidence session in the inquiry into the problems surrounding the ships, Caledonian Maritime Assets Limited (CMAL) chief executive Kevin Hobbs confirmed costs could far exceed the initial £97m price tag.

Shipbuilding: Former finance secretary Derek Mackay attributed delays to 'mismanagement'.Getty Images
Shipbuilding: Former finance secretary Derek Mackay attributed delays to ‘mismanagement’.

Mr Hobbs also said CMAL is not contractually obliged to pay the extra sum.

Questioned by committee convener Edward Mountain, Mr Hobbs confirmed the figure could be as high as £250m, when the initial cost is taken with a £45m Scottish Government loan and the £110m estimate from the appointed turnaround director Tim Hair.

He added: “We will pay £97m for those vessels, that’s what we’ve signed up to. Someone has to pay for it but CMAL isn’t.”

Mr Mountain replied: “No, the Scottish taxpayer is.”

CMAL also accused the former independent adviser to the Scottish

Government Luke van Beek of signing off a payment to Ferguson Marine for £30m of work that had not been completed.

In a submission to the committee before the appearance of Mr Hobbs and director of vessels Jim Anderson, CMAL said: “It appears to CMAL that Mr van Beek personally sanctioned the drawdown of £30m public funds against designated progress events that were never fulfilled by the shipyard.”

Mr Anderson said he was “gobsmacked” when he heard the allegations.

“We will pay £97m for those vessels, that’s what we’ve signed up to. Someone has to pay for it but CMAL isn’t.”

Kevin Hobbs, Caledonian Maritime Assets Limited

Previous evidence from former Ferguson Marine director Jim McColl described problems in the relationship between the yard and CMAL as being at fault for the delays to the ships.

While the directors accepted there was an issue with the relationship, they said it was not as bad as Mr McColl stated before the committee.

Mr Hobbs said: “We don’t believe that it broke down to the extent that was claimed.

“There were two levels of engagement, there are weekly and monthly meetings in the yard and they carried on all the way until the middle of August 2019 – when the yard went into administration.”

Mr Hobbs said the relationship shifted when they were “dragged” into an office and “read the riot act” by senior management in the spring of 2017 at the yard for saying the work was not going fast enough.

The manager, who was not named by Mr Hobbs, is said to have told them: “You keep saying that we’re not performing … we guarantee we’re going to deliver these ships in May 2018 and July 2018.”

Mr Hobbs said there was “no chance” that would happen.

The chief executive said a claim from Ferguson Marine for £17.5m in extra funding came a few months later.