Ferguson Marine: Ferry fiasco chief warns of future 'struggle'
Ferguson's chief executive Graeme Thomson pushed for a direct award by the government to the yard saying that the yard lost out on the Scottish Government-backed small ferry deal over price.
Asked about claims that any direct award would not break the law he said: "I don't know whether they could direct award or not."
But he said he supported lobbying for a "shift in emphasis" over where it can get direct awards.
The yard's business plan to 2029 had assumed that it would get a direct award for the Scottish Government's small vessel replacement programme. But the Scottish Government decided this was not possible due to UK subsidy laws and the yard lost out to Polish firm Remotnowa on the first phase of the programme to deliver seven ferries.
With the MV Lord of the Isles having sailed for the first time in 1989, the Scottish Government – through its wholly-owned ferry operator CalMac and procurement body Caledonian Maritime Assets Limited – is looking for a replacement.
The tendering process has not yet opened but Ferguson Marine in Port Glasgow, Inverclyde – which is also owned directly by the Scottish Government – is expected to bid for the contract.
The yard's reputation has been marred in recent years due to the building of the Glen Sannox and Glen Rosa – intended to operate between the Isle of Arran and the mainland.
The cost of the two vessels is expected to have risen over fivefold and repeated delays have seen only the Glen Sannox enter service so far.
Mr Thomson said that he supported a direct award for the Lord of the Isles replacement.
'I am not aware of what might be any challenges or blockers to that, but I know the Scottish Government are considering how that would be sentenced," he said.
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Asked about potential implications if the yard does not win the contract, Mr Thomson said: 'It would be very difficult for us, it would be very challenging.'
The Scottish Government has previously been reticent to award contracts directly to Ferguson, fearing potential legal action under UK-wide state aid regulations which could hold up the building of ships needed for Scotland's west coast islands.
If such a direct award move is not forthcoming, Mr Thomson said Government intervention is needed to ensure Ferguson is operating on a 'level playing field' with international yards that are able to undercut them on costs due to support for their own governments.
'We're okay with competition, as long as we're playing on a level playing field,' he said.
'As long as there's a situation that prevails that international yards can do it cheaper than us because of the tax breaks, the labour rates, whatever, then we'll never be playing on a level playing field.'
Mr Thomson echoed calls from politicians to introduce a social element to the weighting of bids – which primarily focus on design and cost – which would take into account the impact on jobs created in the country, along with consideration of the benefit brought to local supply chains.
He said: "There are ferries coming up... so there's a great opportunity there. We do engage with the workforce and through the management teams when we're preparing estimates, bids, build strategies, structure what we can do, and looking to try and make sure we strike the balance between giving our workforce confidence that they're going to be asked to do something that they believe is challenged but achievable, and actually then making sure we have something that goes to market that is cost competitive.
He raised concerns that there was not a level playing field internationally - with foreign yards getting tax breaks.
Ferguson Marine (Image: Colin Mearns) And he warned that if the market place was solely about cost competitiveness "we will struggle".
The yard announced last week it had been awarded a contract by defence firm BAE Systems to build sections of one of the Type 26 destroyers being built along the River Clyde in Glasgow, with Mr Thomson saying Ferguson will have to 'demonstrate' its ability to BAE in the hopes of winning more work.
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