Ferry Bill hits £300 million and Ferguson yard's future in doubt.
His report states: “The final cost of vessels 801 and 802 remains uncertain. The Scottish Government increased FMPG’s (Ferguson’s) 2022/23 capital funding by £27.7 million to £61.1 million and a further £57.6 million is allocated in the 2023/24 budget approved by Parliament.
“Current FMPG estimates suggest around £9.5 million more will be required to fund the vessels, beyond the amount already approved. This would bring the total cost to £293 million. Remaining costs will need to be considered as part of future budget processes. FMPG will update Parliament on progress before the end of March 2023”.
The Scottish Government issued a letter of comfort to the Ferguson Board in December. This provided assurances that they intend to continue to support the yard for “at least 12 months from February 2023 to deliver the two vessels and in securing a sustainable future for the yard.”
However, the Auditor General warns that “more contingency needs to be built in as risks still remain”. Stephen Boyle adds: “There remains uncertainty about the longer-term sustainability of FMPG. Further investment in FMPG and its workforce will be required for it to be able to secure future contracts once it has completed vessels 801 and 802.
“The Scottish Government has commissioned an independent review of future options for the yard, which is ongoing. Working together, FMPG and the Scottish Government need to establish and clarify plans for the future of the yard as soon as possible.”
The risks to the yard’s future viability have been highlighted in notes to the accounts by Ferguson’s own auditors which, says Mr Boyle, “includes a paragraph to draw people’s attention to these matters”
He goes on to question performance related bonus payments of £87,000 to the senior Ferguson management team during 2021/22. “Appropriate frameworks and governance were not in place and it is not sufficiently clear how performance was assessed. FMPG did not inform, or seek approval from, the Scottish Government for these payments.
“It should have done so as a matter of good practice and governance. The Scottish Government has now clarified its expectations and requirements of FMPG in relation to public sector pay policies and rules”.
Stephen Boyle said: “It is deeply concerning that the costs to complete these ferries have continued to escalate, whilst the island communities these boats are meant to serve remain significantly impacted.
“Despite substantial sums of public money being invested, there is still no certainty over how much the ferries will cost, when they will be ready or whether the shipyard has a viable future.
“It is unacceptable that performance bonuses were awarded to senior managers at the shipyard, without proper governance for such payments. The Scottish Government needs to make sure its rules over pay are followed by this public body.”
Vessel 802 was intended for the Uig-Tarbert-Lochmaddy routes but it is doubtful if she will ever sail on them, even if the work is ever completed. Meanwhile, tens of millions of pounds have also been spent on adapting terminals to await the ferry that will never arrive.