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Audit Scotland - Multiple failings have led to delays and cost overruns which continue to obstruct delivery of island ferries
Major problems remain unresolved at the shipyard constructing two lifeline ferries for Scottish islands. More than two years after the Scottish Government took over control of the shipyard, significant operational failures still need to be fully resolved and further remedial work on the vessels continues to be uncovered.
The project to deliver Vessels 801 and 802 for the Clyde and Hebrides has been beset with delays and spiralling costs. The ferries are now almost four years late, with no certainty on when they will be complete. The total cost of the project is currently estimated to be at least £240 million, around two and a half times the original contract price. These issues have frustrated island communities and weakened resilience across Scotland’s ferry network.
Scottish ministers approved the contract award to Ferguson Marine Engineering Limited (FMEL) in October 2015, despite significant risks caused by FMEL’s inability to provide mandatory refund guarantees and the severe misgivings of Caledonian Maritime Assets Limited (CMAL). There is insufficient evidence to explain why Scottish ministers made this decision.
As the project progressed, delays, costs, and a contract dispute between CMAL and FMEL, escalated. Despite CMAL and the Scottish Government intervening to support the project, FMEL entered administration in August 2019, with the Scottish Government bringing the shipyard into public ownership.
Stephen Boyle, Auditor General for Scotland, 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.
