Nicola Sturgeon singled out for criticism as MSPs report on ferries fiasco
The report was carried out by the Public Audit Committee.
Last updated 26th Mar 2024
A long-awaited report into the Ferguson Marine ferries fiasco has identified serious failings, including Nicola Sturgeon's decision to prematurely announce the shipyard as preferred bidder.
After months of investigation, a Holyrood committee has found taxpayers and island communities have been "badly let down" by many of those involved in the project.
The 124-page report from the Public Audit Committee is the most comprehensive account so far of the troubled programme to build the Glen Sannox and the as-yet-unnamed hull 802.
The first of the ships, the MV Glen Sannox, is intended to serve the Isle of Arran, but both are now five years late and with a price tag nearly tripled to almost £300 million.
READ MORE: Seeing for themselves - MSPs visit troubled shipyard
READ MORE: 2nd Ferguson ferry could also serve Arran
Public announcement of preferred bidder
The decision to publicly announce Ferguson Marine Engineering Ltd (FMEL) - at that point owned by businessman Jim McColl - as the preferred bidder in 2015 came in for particular criticism.
First Minister Ms Sturgeon personally attended the shipyard for the announcement, and the committee said the move "almost certainly" weakened the negotiating position of the ferry-owning body CMAL when problems emerged later.
One section of the cross-party committee's report says: "Given that it was clear that considerable negotiations were still required, we question the First Minister's decision to publicly announce the preferred bidder.
"In light of the contradictory views on offer, further explanation should have been sought by ministers before the final decision was taken.
"The committee is not convinced that such a public announcement was necessary or indeed appropriate for this project, especially at that time, given the considerable work and negotiation that was required before CMAL could take a decision to award the formal contract.
"We believe that this almost certainly weakened CMAL's negotiating position with FMEL, particularly as important details of the contract were still being worked out.
"It also remains unclear why the First Minister led on the preferred bidder announcement and why the First Minister's press release and associated social media communications did not reflect that there were 'significant negotiations to be concluded'."
The two SNP members of the committee, Willie Coffey and Colin Beattie, did not support this part of the findings.
The committee's report said the launch of the Glen Sannox in November 2017 - an event also attended by the First Minister - was premature.
Ministers were not aware of CMAL's concerns about the launch but should have played a more active role, the report said.
Vital that 'lessons are learned'
Committee Convener Richard Leonard said: "The people of Scotland have been badly let down by this project.
"There have been collective failures at Government and agency level from the start.
"It has been dogged by a lack of transparency; by ineffective governance arrangements; by poor record keeping within the Government; and by baffling communication failures.
"It is vital that lessons are learned.
"That means much-needed reform of governance arrangements for future vessel projects.
"But it also means a change in the way the Government and its agencies conduct themselves and are accountable to Parliament and the people.
"That is a challenge for the Permanent Secretary and the new first minister."
Recommendations
A number of recommendations are made by the committee, including greater transparency and record-keeping by the Scottish Government.
Other members of the Government and public agencies also came in for criticism in the report.
The committee expressed "serious concern" at then infrastructure secretary Keith Brown's failure to answer key questions about his role in the awarding of the contract.
It said former transport minister Derek Mackay showed "poor judgment" in sending an email to a constituency MSP, which FMEL interpreted as waiving its requirement to provide a builders refund guarantee.
The auditor general is still investigating the procurement process for the contract, following claims made in a BBC Disclosure documentary.
The committee was also frustrated by delays in receiving evidence from Transport Scotland officials, leaving them questioning the level of "respect" shown to parliamentary scrutiny.
Transport Scotland "consistently failed to accurately and timeously reflect CMAL's significant concerns to Scottish ministers", the MSPs said.
CalMac's ageing ferry fleet
MV Glen Sannox launch
Perhaps the most infamous ferry in Scotland, MV Glen Sannox was launched by First Minister, Nicola Sturgeon, at the Ferguson Marine yard in Port Glasgow in November 2017. The yard won the contract to build two ferries which could be powered by either regular marine diesel fuel or LNG. Five years later the ship has yet to enter service and the yard has been nationalised after falling into administration amid a row with the Scottish Government about the delays and escalating cost of the project.
MV Glen Sannox delays
MV Glen Sannox is intended to become the main ferry for the service between Ardrossan and Brodick on the Isle of Arran. A sister ship - as-yet unnamed - will operate in the Western Isles. The vessels are more than five years late and will cost £250m - more than twice their original budget. The ship has required extensive remedial work including alterations to the hull and replacement of the original electrictal cables which were found to be too short. It is expected to be in service in summer 2023.
Busiest route
CalMac's busiest route is the crossing between Largs and Cumbrae Slip in the Firth of Clyde, which in summer operates every 15 minutes, although drivers can be forced to wait in queues of more than an hour at the busiest times. In 2021 it carried 175,000 vehicles and 619,000 passengers.
Oldest vessel
CalMac's least-busy route is a summer-only service between Ardrossan and Campbeltown in Kintrye, which carried just 8,427 passengers in 2021. It is operated by the firm's oldest ship, MV Isle of Arran, which was launched in Troon in 1983.
Passengers only
CalMac operates the passenger-only service between Dunoon and Gourock. For many years the route also carried vehicles but there was long-standing controversy with claims of unfair public subsidy against a rival private operator. The service can be vulnerable to poor weather conditions relying on lighter vessels such as the catamaran Ali Cat.
Battery power
For the last decade CalMac has made the first moves to reduce the carbon emissions of its fleet with the introduction of three hybrid ferries which can operate on battery or diesel power. They were constructed at the Ferguson yard in Port Glasgow and operate some of the shortest crossings on the network
Private rival
There are ferry services which are not run by CalMac. The privately-owned Western Ferries operates between McInroy's Point (near Gourock) and Hunter's Quay (near Dunoon) on a turn-up-and-go service using up to four vessels at one time.
Foreign-built ships
Until the recent Ferguson scandal CalMac's newest and largest ships had been built by foreign yards, including the MV Finglaggan, launched by the Remontowa yard in Poland in 2010 to serve Islay.
Capacity issues
Since 2016 The introduction of the cheaper RET fares structure - linked to the cost to drive the same distance by road - and increasing popularlity of 'staycation' and campervan touring - is linked to increasing pressure on routes to the most popular islands, with sailings booked-up weeks in advance.
Meeting between Nicola Sturgeon and Jim McColl
It is "particularly concerning", they said, that no full record exists of a meeting between Ms Sturgeon and Mr McColl from May 2017.
The Scottish Government has produced an email discussing the contents of the meeting but no full minutes.
It is still unclear how large amounts of public money were spent during Mr McColl's ownership of the yard, the report notes.
Responding to the committee's findings, a Scottish Government spokeswoman said: "The Scottish Government welcomes the report from the Public Audit Committee (PAC). We will study its findings carefully before issuing a full response to the committee.
"Changes have already been put in place to address many of the issues raised. This includes working with the shipyard's senior management team to improve governance and accountability and revising processes for vessel procurement.
"The Scottish Government is committed to transparency and has proactively published more than 200 documents on its website. We have co-operated at every stage of the PAC inquiry, as well as those previously undertaken by the Rural Economy and Connectivity Committee and Audit Scotland.
"Ministers have apologised for the delay to the ferries and the distress and difficulty caused.
"We are committed to their completion, securing a sustainable future for the yard and supporting our island communities that rely on this type of vessel on a daily basis."
Commenting on the report, Scottish Liberal Democrat economy spokesman Willie Rennie said: "The Scottish Government is still trying to skirt the consequences of their actions.
"Despite the protests of SNP members, there is sharp criticism of the First Minister, former economy secretary Keith Brown and disgraced former transport minister Derek Mackay."