‘Significant challenges’ continue to threaten delivery of delayed ferries

Multiple failings and a lack of transparency continue to plague the delivery of two delayed and over-budget lifeline ferries, a damning new report from the public spending watchdog has said.

The two new vessels were meant to be delivered in May and July 2018 at a cost of £97m.

The project has been beset by problems almost since inception, with the estimated final cost now standing at £240m and no delivery date in sight.

Audit Scotland has said there continues to be “significant operational failures” more than two years on from the Scottish Government taking control of the Ferguson Marine shipyard.

The government has committed to working with the shipyard to ensure the ferries are delivered as soon as possible, with economy secretary Kate Forbes adding the decision to intervene had saved hundreds of jobs.

But the report warned the ongoing problems had led to frustration among island communities and weakened resilience across the ferry network.

Auditor general Stephen Boyle said: “The failure to deliver these two ferries, on time and on budget, exposes a multitude of failings. A lack of transparent decision-making, a lack of project oversight, and no clear understanding of what significant sums of public money have achieved. And crucially, communities still don’t have the lifeline ferries they were promised years ago.

“The focus now must be on overcoming significant challenges at the shipyard and completing the vessels as quickly as possible. Thoughts must then turn to learning lessons to prevent a repeat of problems on future new vessel projects and other public sector infrastructure projects.”

Last month, the Scottish Parliament was told of a further delay after more remedial works were deemed necessary.

FMPG, the publicly owned company which took control of the shipyard at the end of 2019 after Ferguson Marine Engineering Limited (FMEL) went into administration, is expected to set out a new timetable for delivery by the end of this month.

But Audit Scotland said the company’s ability to improve was being “limited by insufficient information”.

The watchdog also criticised a lack of transparency from Scottish ministers about the decision to go ahead with the contract after FMEL said it would not provide a full refund guarantee, which meant CMAL, the body which owns Scotland's ferries, and the Scottish Government had to take more of the financial risk.

The report recommends that completion of the two vessels be prioritised, after which a formal review of what went wrong with the project must be commissioned to ensure lessons are learned.

Kate Forbes said FMPG “continues to evolve” and insisted the procurement of the two vessels was “undertaken thoroughly, in good faith and following appropriate due diligence, and suggestions to the contrary are wrong.”

She added: “There is no doubt that getting the vessels completed has been extremely challenging but let me be absolutely clear, these vessels must be delivered as soon as possible. There can be no ifs or buts when it comes to lifeline services for our island communities. I have made that expectation absolutely clear to the Ferguson Marine leadership and Board, and we will continue to work closely with the yard to ensure the vessels enter service as soon as possible.”

Scottish Labour accused the government of “relentless incompetence” throughout the challenges.

Transport spokesperson Neil Bibby said: “The First Minister must finally take some responsibility for the mess her government has created, and set out a real plan for how they will stop costs spiralling, prevent any more delays and build a sustainable future for the yard and for Scotland’s shipbuilding industry.”