It is depressing to follow the sad story of ferry building in the UK, especially involving Ferguson at Port Glasgow and Calmac/CMAL.
Ferguson’s boss Jim McColl, recently a local hero and darling of the media and politicians alike, is making a huge claim for more ferry cash from the Scottish Government.
McColl is also holding talks with a Canadian shipyard which he states won a similar case against Quebec’s government.
Ferguson claims their design costs have spiralled on the dual-fuel ferries, leading to significant delays in the vessels being delivered. The contract was originally agreed at £97 million, but McColl argues that the cost of delivering the vessels has soared because of repeated design changes requested by CMAL. The first Glen Sannox is now scheduled to be delivered in the middle of 2019, more than one year later than planned. Mr McColl said a compensation bid will be launched due to CMAL’s “point blank refusal to discuss the matter”. Mr McColl argues at least an increase of 50% to 60% will be due on the vessels.
Mr McColl believes Ferguson’s stance is similar to a case in Canada, where Davie Shipbuilding mounted a successful claim after costs over-ran on the building of “first in class” ferries. He said the Government of Quebec had initially priced the Canadian contract at C$125 million, before the price was ultimately re-set at C$300m. Mr McColl said the similarities between the two cases are “uncanny”..
On the other hand, the Scottish Governmnt owned CMAL said in a statement: “Ferguson Marine Engineering Ltd (FMEL) is under contract to supply the design and build of the two dual fuel ferries. It is an industry standard design and build contract with a fi xed price and defi ned delivery dates. FMEL entered into the contract with full and prior knowledge of the specifi cation and terms of the contract. CMAL fundamentally disagrees with any assertion that there have been signifi cant design changes to the vessels. Minor changes have followed the contractual process and costs for these have been agreed with FMEL. These costs have been covered by a three per cent project contingency budget held by CMAL.”.
Complicating things further, Ferguson were in receipt of a secret £15 million loan from the Scottish Government and Ministers were criticised by Audit Scotland over a loan it gave to Ferguson last year, after the yard had run into cash fl ow diffi culties as work on the CMAL ferries fell behind schedule. This only emerged when the Scottish government was about to agree a further loan of £30m.