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Shipyard needs urgent investment to survive, MSPs warn

BBC An overhead drone shot of the Ferguson Marine Port Glasgow shipyard. It includes several warehouses and a yellow crane, with cars parked around the edges. It sits on the Clyde river, which can be seen in the background.BBC
The Ferguson Marine shipyard in Port Glasgow was taken into public ownership in 2019

The publicly-owned Ferguson Marine shipyard needs "urgent investment" to become more competitive and survive, according to a committee of MSPs.

The yard has no pipeline of work lined up beyond the ferry MV Glen Rosa, which is expected to be delivered by the middle of next year, raising concerns for its future.

Holyrood's public audit committee said leadership and governance failings along with the delays and cost overruns building two CalMac ferries had caused "reputational damage", despite the yard's long and proud history.

The MSPs said there was no shortage of potential work, and recovery was possible but it would require investment and better oversight.

The Port Glasgow shipyard recently missed out on a government-funded order for seven small CalMac ferries, seen as well-suited to its capabilities.

During a visit to Ferguson's last month, committee members were told its bid was rated best on quality, but labour costs meant it lost out to a rival shipyard in Poland.

The committee said the yard's inability to compete effectively in the open market was, in part, "the result of decades of under investment".

Committee convener Richard Leonard told BBC Scotland News: "When we visited the yard it was obvious that it needed more capital expenditure, but there was no shortage of work out there.

"If they were able to compete for the work that's coming on stream, whether it's more smaller vessels for CalMac, or to support the North Sea renewable wind developments, or to support the Border Patrol service, there is lots of work in the pipeline, it's just not going to Ferguson's at the minute."

A year ago Scottish ministers promised £14.2m of investment over two years to improve productivity, although it remains unclear how much has yet been delivered.

The Labour MSP said he believed about £25m was required to modernise the shipyard effectively. "This is a yard with a distinguished past which could have a distinguished future as well," he said.

He added: "There is no doubt that the yard has suffered significant reputational damage and that the workers at Ferguson Marine deserve better, the communities waiting for a new ferry deserve better and the people of Scotland deserve better."

PA Media The Glen Sannox sits on the water. It is a white and black ferry with "Caledonian MacBrayne" written on the side. It is early morning and only just starting to get light, with heavy clouds in the skyPA Media
The Glen Sannox entered service in January after a near seven year delay

The report raised concerns about a number of recent issues, some of them previously highlighted by the Auditor General. They included:

  • A decision to award two redundancy packages to two senior managers, above the £95,000 public sector threshold, without government approval.
  • Top up salary payments made to an employee of ferries procurement body CMAL who was seconded to the yard's management. He was later redesignated as self-employed and submitted invoices totalling £144,600.

In May, Ferguson Marine said the delivery date for Glen Rosa had been pushed back by another nine months and the cost of the ship had increased by up to £35m.

The committee expressed "serious concern" at this and urged ministers to give "urgent clarification" about where the additional funds were coming from.

MV Glen Rosa ferry slides down the slipway into the River Clyde with a crowd watching in the shipyard.
MV Glen Rosa was launched from the Ferguson slipway in April 2024 but it still requires fitting out work at the quayside

The Ferguson shipyard in Port Glasgow was nationalised in 2019 after contracts for the two dual-fuel ships, Glen Sannox and Glen Rosa, ran into difficulties and ferries procurement body CMAL rejected claims for extra costs.

The last commercial yard on the River Clyde, which employs about 300 workers and apprentices, is now run by a government-owned company, Ferguson Marine Port Glasgow (FMPG).

Delays and design challenges continued under public ownership with the cost of the two ships now about £460m if written-off government loans and money paid out prior to nationalisation are included. The original contract price was £97m.

Glen Sannox was finally delivered to CMAL last November, nearly seven years late. The second ship is due by the end of June 2026.

While many competing explanations for the problems have been put forward, there has been broad political consensus that the workforce themselves are not to blame.

One of the committee's recommendations is that workforce representatives be given a greater role in board meetings.

The MSPs noted that the yard remained hopeful of securing orders for three small CalMac ferries in the second phase of the small vessels replacement programme.

A report on their recent site visit also revealed that management had asked ministers to consider directly awarding a forthcoming contract for a replacement for MV Lord of the Isles, an 85m long ferry which was previously built by Ferguson.

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