Ministers are investing in shipyards because they are looking for ferry builders

Scottish ministers are to invest a further £14m in Port Glasgow’s Ferguson Marine shipyard.

The announcement came after the government confirmed the yard would not directly win the contract to replace CalMac’s aging fleet of small ferries, with the contract put out to tender.

Ferguson Marine oversaw the long-delayed delivery of two larger ferries to the busy CalMac Arran route.

Deputy First Minister Kate Forbes said a direct award would involve “substantial risks and uncertainties” because of UK subsidy laws.

The first phase of the Small Vessel Replacement Program (SVRP) will involve replacing seven ferries on the Clyde and Hebrides network with fully electric boats.

It is estimated to cost around £175 million, with up to three more ferries to follow in a second phase.

The procurement process for phase one is expected to take around eight months and will be led by CMAL, the government company that procures ships for the CalMac fleet.

The boss of nationalized Ferguson Marine in Port Glasgow previously said he hoped the yard would win the contract and secure its future once it completes the delayed Glen Sannox and Glen Rosa ferries.

But Deputy First Minister Kate Forbes said a government analysis found that awarding the contract directly to the firm would present “substantial risks and uncertainties” to the shipyard and communities that rely on the vessels because of the “stringent conditions” imposed by the British subsidy control. Act.

“Instead, we will do everything legally possible to support the shipyard and the workforce to ensure a long-term future, which is why we have agreed initiatives and funding to improve productivity,” she said.

A total of £14.2 million is to be invested in the yard over two years – subject to legal, financial and commercial review, which the government says should be completed by the autumn.

The government also said talks with BAE Systems are in the final stages about Ferguson Marine getting additional work on the Type 26 Frigate programme.

CalMac’s aging small craft fleet includes a ferry that is now nearly 50 years old.

The first phase of the SVRP is expected to deliver the first replacement vessel in autumn 2026.

The first phase also includes related port works and upgrading of offshore power plants on various routes.

The second phase will focus on the procurement of up to three new small vessels of a different design.

The scheme was pushed back last year, saving the government £41m, with spending deferred to the 2024-25 financial year.

At the time, Finance Minister Shona Robison said the program remained “on track”.

Transport Minister Fiona Hyslop said the government intended the new vessels to be deployed on seven existing routes, but they were expected to “benefit” two other routes from moving existing ships.

“These nine routes currently serve around 30% of car and passenger traffic on the Clyde and Hebrides network,” she said.

“The new vessels will also be electric, which will help us achieve significant improvements in emissions and local air quality and bring us to a lower carbon ferry network.”

CMAL chief executive Kevin Hobbs said the tender was “great news for island communities”.

He added: “We look forward to delivering fully electric rescue vessels over the coming years.”

Ferguson Marine was awarded the £97m contract for two large Arran ferries in 2015, a year after businessman Jim McColl rescued the yard from administration.

The two ferries were originally due for delivery in 2018, but faced repeated design issues and cost overruns.

Ferguson Marine aims to hand over Glen Sannox, the first of the completed ships, in the week commencing 19 August.

Glen Rosa was launched from the chute earlier this year and equipment work is expected to be completed by September 2025.

Mr McCall’s FMEL claimed that CMAL’s original specification for the ships was rushed and flawed and that the subsequent intervention resulted in additional costs.

CMAL rejected the claims, insisting that poor management decisions and “catastrophic failure by the supplier” were the cause of the problems.

Mr McColl’s request for additional costs was rejected and the standoff eventually saw the firm fall back into administration in 2019. It was then taken over into public ownership.