2 days ago
- Business
- The Herald Scotland
Glen Rosa a reminder of challenges facing UK shipbuilding
The themes of these relevant and supporting strategies crossed my mind earlier this month as close to home, MV Glen Rosa passed a further significant step on its journey into service as it left dry dock for interior fit out back at the quayside of Ferguson Marine.
I think most of us now are aware of the complexity of the design and the build difficulties that have resulted in late delivery. However, for me, the images of the now near finished ship in dry dock really illustrate the impressive scale of what has been achieved by the Ferguson team, and it's a fitting image that summarises the impressive complex engineering that the whole system of the ship contains.
Recognising, and having pride in the engineering achievement is not intended to dismiss the cost to both public purse and loss of service to island communities that the long delays to delivery have brought. It's important to address the major errors by all stakeholders through this part of the yard's history, but equally 'we are where we are', and now it's time to look forward more than back.
The £160m award earlier this year for seven small electric ferries to a Poland yard rightly raised questions about why no consideration for social value was included in the bidding process, despite the UK's current National Shipbuilding Strategy calling for public tenders to include for this. The call for this inclusion rightly seeks only that there is a level playing field to compensate for significantly higher levels of state investment, favourable tax incentives, or lower labour rates out with the UK. In this case the awarding body deemed the risk of legal challenge sufficient enough to not include it.
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It's a theme that's painfully present here in Scotland given that Alexander Dennis is currently fighting to keep their Scottish manufacturing operation open, after a deeply disappointing outcome from the Scottish Zero Emission Bus Challenge (ScotZEB2) award last year. In that case over 80% of the £42m Scottish Government grant ended up funding the manufacture of those buses principally in China and also Egypt. Getting the balance right between risk and reward for public procurement funded by taxpayers is critical, and it's hard not to perceive that elsewhere the appetite to 'lean in' is higher.
For Ferguson Marine, its recent contract award by BAE Systems for build of three sections for HMS Birmingham is more than welcome, but we should be clear that this alone will not sustain the business in the long term. If we lose the business, we also lose the social, economic and community benefits to the wider Inverclyde area, and indeed Scotland, that its high-quality employment and training continues to deliver.
At this risk of stating the obvious, to sustain a shipyard, it needs to build whole ships from design to delivery. Module build will keep a key section of the engineering fabrication, welding and technical support occupied, but full ships and their complex design and development employ and grow a much wider skillset, and there needs to be a pipeline of demand that keeps those wider skills current and trains new additions for the future.
This isn't a challenge just for Ferguson Marine either, it's a pattern that's replicated across the UK, where outside of naval shipbuilding, the number of commercial ships designed, built and commissioned from scratch is far too low for an island nation that has and will continue to depend on maritime connectivity to sustain ourselves.
If we return to the Strategic Defence Review, its candid tone of being ready for a 'move to warfighting readiness' still makes me sit up straight, with the planning - and capacity - for that readiness a sharp reality check. A wider, stronger, UK shipbuilding enterprise that includes a step change in the number of commercial vessels is the answer, and build contracts procured with public funds should be our starting point.
To go a step further, there is a valid argument that given the current precarious geopolitical climate, we should consider the potential dual use of publicly procured ships in terms of what role they could play in the event of the UK being pulled into conflict and so review their build in terms of sovereign capability.
In the first instance however, the procurement process for the replacement for the MV Lord of the Isles, built by Fergusons thirty-five years ago, is the front and centre opportunity to make sure that the public investment to sustain and grow Ferguson Marine over the last decade has not been in vain.
The yard's own call for a direct award under the relevant provisions of the Procurement Act 2023 has gathered wider support politically and regionally, and my understanding is that consideration is underway as part of the wider procurement planning.
Let's hope the evaluation on that balance of risk is in favour of sustaining a business of significant importance to Scotland, and when we consider shipbuilding capacity, the UK too.
Paul Sheerin is chief executive of Scottish Engineering
