Ferguson shipyard to be given ‘working capital’, Transport Secretary tells MSPs

A publicly owned shipyard with no work on its order books for next year is to be given capital to help it build a “small number of tugboats”, MSPs were told.

Transport Secretary Stephen Flynn told Holyrood he had agreed a proposal from Ferguson Marine in Port Glasgow for “working capital” to allow it to build the new boats, which would be put up for sale on the commercial market.

Mr Flynn insisted agreeing the request from the shipyard was a “sensible commercial approach”.

It comes after he told Holyrood that after the long overdue and over budget Glen Rosa ferry is completed, “the yard has no contracted shipbuilding work scheduled for 2027”.

The Scottish Government had previously pledged to award work to build four smaller vessels – including two ferries – directly to Ferguson Marine.

However Mr Flynn said that “robust due diligence” work was still being carried out before that contract be awarded.

He told MSPs the working capital was being provided as ministers to seek to give “certainty for the yard during the gap between the delivery of the Glen Rosa and the award of these new contracts by making sure we have a commercial alternative in place with tugboats”.

It comes after bosses at the shipyard announced in August that it was looking for voluntary redundancies, with up to 70 positions at the shipyard set to go.

In an update to Holyrood on Thursday, Mr Flynn said that “the business has requested working capital to enable it to build a small number of tugboats for subsequent sale into commercial markets”.

The Transport Secretary said: “I have agreed that this proposal should be taken forward because I agree with the board that it represents a sensible, commercial approach to maintaining productive activity within the yard.”

Providing working capital to the yard “has the potential to retain critical shipbuilding capability and workforce skills during an important period for the business,” Mr Flynn added.

He said: “I have therefore asked officials to work with the company to progress the necessary commercial, financial and governance arrangements as quickly as possible.”

He went on to insist that the government – which took Ferguson Marine into public ownership in 2019 – believes that it “can have a strong future as a modern and competitive shipyard”.

Mr Flynn said: “Our ambition is not simply to preserve Ferguson Marine. It is to strengthen Scotland’s commercial shipbuilding capability, retain critical skills and ensure the Clyde continues to play an important role in our maritime and industrial economy.”

However, Scottish Liberal Democrat transport spokesperson Willie Rennie said it was “clear” from Mr Flynn’s statement that the “government failed to carry out appropriate legal checks” when it announced plans to make the direct award of four vessels to the yard.

The Liberal Democrat MSP added: “The consequences are being felt by the third of the workforce who have lost their jobs as a result of the government’s negligence.”

Meanwhile, Scottish Conservative MSP Stephen Kerr said: “This was yet another SNP statement on Ferguson Marine that was painfully thin on detail.

“It confirmed that the announcement of a direct award for four new vessels in March was nothing more than a con made to the people of Inverclyde mere weeks before the election.”