According to the British Broadcasting Corporation (BBC), a coalition initiative comprising community leaders, civic group representatives, religious figures, and politicians from three parties is urging the Scottish government to increase its support for the state-owned Ferguson shipyard. This effort aims to save the facility from facing a complete loss of orders after 2026.
An open letter drafted by the General, Manufacturing and Business (GMB) Union and jointly signed by local politicians from the Scottish Labour Party, the Scottish National Party (SNP), the Scottish Conservative Party, and the Bishop of Paisley has been submitted to Scotland’s First Minister John Swinney.
The open letter states that Ferguson Shipyards should be awarded the new shipbuilding contract for Caledonian MacBrayne (CalMac), the Scottish island ferry operator, directly to move beyond the controversy surrounding the two previously delayed and overbudget vessels.
Since 2015, Ferguson Shipyard has endured a decade-long period of decline. This open letter from the Scottish Coalition Initiative aims to help restore its reputation. The letter calls on the Scottish Government to ensure that the replacement vessel for CalMac’s MV Lord of the Isles remains with Ferguson Shipyard for construction. The new vessel will be smaller and simpler in design than the LNG dual-fuel ferry that caused the yard significant difficulties.
The open letter states: “While the root causes of the problem are still controversial, the “highly skilled and dedicated workforce is completely innocent of any fault.” At the same time, although “bids supported by low wages” allow foreign shipyards to always outperform British shipyards on cost, the socio-economic value of the shipyard operator Ferguson Marine to the Inverclyde region is “immeasurable.”
The open letter stated: “While the root cause of the problem remains a matter of debate, ‘the highly skilled and dedicated workforce is entirely free of blame.’ Meanwhile, although ‘low-wage-backed bids’ allow foreign shipyards to always outcompete British shipyards in terms of costs, the socioeconomic value of Ferguson Marine—the shipyard operator—to the Inverclyde area is ‘immeasurable.'”
Transport Scotland said: “Shipbuilding is a highly competitive global market and any direct award of public contracts must comply with applicable procurement and subsidy controls to avoid the risk of legal challenges. Department members will review ship contracts (including the MV Lord of the Isles) on a case-by-case basis in due course to determine legally compliant market pathways and assess potential community benefits.”
The department further stated: “Under regulations governing public procurement and subsidy controls, direct award of public contracts is restricted to strictly defined circumstances. Commercial proposals and subsequent steps regarding the replacement of the ferry in question are currently under review and will be confirmed at the appropriate time.”
Louise Gilmour, General Secretary of GMB Scotland, questioned the Scottish Government’s previous insistence that “competition rules prohibit direct award of ferry contracts.” She stated: “When foreign bidders’ offers are underpinned by minimum wages and tax breaks, price must never be the sole criterion for such contracts. In past tenders, the immense social and economic value of the shipbuilding industry to the Inverclyde community, along with the contributions of Ferguson Marine, have not been given the consideration they deserve.”
Ferguson Shipyard’s future has been a source of speculation since it lost a key order to build seven small electric ferries for CalMac in March of this year. Following a competitive bidding process, CMAL, the UK government-controlled ferry company, ultimately awarded the contract to Polish shipbuilder Remontowa, which undercut the Scottish shipyard. Although Ferguson Shipyard has since secured a subcontract for frigates, it will not receive any new ship orders after the MV Glen Rosa is delivered in 2026.
Inverclyde District Councillor Stuart McMillan stressed: “The shipyard needs a stable source of orders. In addition to naval contracts, there are still many opportunities in the commercial shipping sector. The shipyard is fully capable of taking on more business. The shipyard has successfully delivered orders in the past and will be able to do so in the future.”
Currently, Ferguson Shipyards is embroiled in disputes over delivery delays and cost overruns for two LNG dual-fuel ferries (“MV Glen Sannox” and “MV Glen Rosa”) ordered by CalMac in 2015. Both vessels involve highly demanding technical specifications and gas propulsion systems unfamiliar to UK shipyards.
CalMac’s dual-fuel ferries were originally scheduled for delivery in 2018. The first vessel, the MV Glen Sannox, has been delayed seven years to November 2024, and the delivery of the second vessel, the MV Glen Rosa, has now been postponed to at least 2026. In terms of cost, the two ships initially cost £97 million, but now, including bad debt write-offs (which usually refers to the borrower’s failure to repay on time, and after a period of collection, the lender decides to remove the debt from the books and not continue to pursue it), the cost has reached £460 million, nearly five times the original contract price.
CalMac’s dual-fuel ferries were originally scheduled for delivery in 2018. The first vessel, MV Glen Sannox, has been delayed by seven years and is now slated for delivery in November 2024. The delivery date for the second vessel, MV Glen Rosa, has been pushed back to at least 2026. Regarding costs, the initial construction price for both vessels was £97 million. Today, including bad debt write-offs (typically referring to situations where borrowers fail to repay loans on time, and after a period of collection efforts, lenders decide to remove the debt from their books and cease further pursuit), the total cost has ballooned to £460 million—nearly five times the original contract price.
The CalMac dual-fuel ferry project proved to be a hot potato for Ferguson Shipyard. Plagued by design and construction issues as well as contractual disputes, the project fell severely behind schedule. The shipyard was dragged into near bankruptcy and was nationalized by the Scottish Government in 2019.
The CalMac dual-fuel ferry project is undoubtedly a “hot potato” for Ferguson Shipyard. Due to problems such as design and construction, contract disputes, etc., the shipbuilding progress of the project has been seriously delayed. The shipyard has been dragged to the brink of bankruptcy and was nationalized by the Scottish government in 2019.
Public records indicate that Ferguson Shipyard was established in 1903, boasting a 120-year history of development. To date, it has constructed over 380 vessels, including one-third of the CalMac fleet’s ferries. The completion and delivery of the MV Glen Rosa ferry represents the shipyard’s most significant current production task.