Scottish Government to Nationalize Last Commercial Shipbuilder

By ,   August 12, 2019 ,   Cruise Industry

This week, Scotland's Government will nationalize the last civilian shipbuilder on Clyde in an effort to save two high-profile shipbuilding contracts. The Scottish finance secretary, Derek Mackay, said ministers were "likely to take over running Ferguson Marine Engineering from its owner later this week" after a long dispute about cost overruns on 2 passenger ferries.

Ferguson’s owner and founder of Clyde Blowers Capital - the billionaire Jim McColl, accused the government and the state-owned ferry agency Caledonian Maritime Assets of "failing to pay for extra work on the prototype hybrid-powered ferries."

Last week, McColl put Ferguson Marine into administration after running out of money and the shipyard will close on Thursday, August 15, unless a new buyer or the government steps in.

The ferries are scheduled to run on two Hebrides routes - one servicing Arran Island (from mainland Scotland) and one between Lochmaddy (North Uist) and Isle of Skye, as part of Caledonian MacBrayne (aka CalMac) fleet.

Isle of Arran (Brodick, Scotland)

Image: Isle of Arran (Brodick, Scotland)

McColl accused Caledonian Maritime of "making costly design changes," not covered by the fixed-price design and build contract, set at GBP 97 million. He said that the redesigns would cost GBP 61 million and offered to pay up to GBP 40 million towards them, but a government review supported the view of Caledonian Maritime that the changes were included in the contract.

According to the Scottish government, a bail-out for Ferguson Marine would "break state aid rules and invite legal challenges from unsuccessful bidders." McColl already received GBP 45 million in Scottish government loans due to cash flow problems with the ferry contract.