£13m written off the value of public stake in BiFab

Getty Images The BiFab Methil yard in Fife — The BiFab Methil yard in Fife

The value of the taxpayers' stake in the mothballed BiFab fabrication yards has been slashed by £13m.

BiFab's yards in Methil and Burntisland are currently mothballed as they battle to secure work on a £2bn offshore wind farm off Fife.

Figures have emerged showing the Scottish government loaned BiFab £19m in 2017-18 and then converted this into shares in the loss-making business.

But Audit Scotland has ruled this equity stake is now only worth £6m.

Details of the loans to BiFab only go up to the end of March last year and the Scottish government declined a request from BBC Scotland to clarify the total amount invested in BiFab to date.

The Scottish government pointed out the loans were used to try and secure the yards' future when hundreds of jobs were at stake.

A spokeswoman said: "The Scottish government provided a loan facility to BiFab to allow completion of the works on the Beatrice contracts.

"It was agreed that these funds would be converted to a minority equity stake in BiFab, not exceeding 38%."

But Murdo Fraser MSP, Scottish Conservative finance spokesman described the government's return on taxpayer investment as "pretty woeful".

"It is obviously important to try and secure a future for struggling businesses but the taxpayer is consistently footing pretty high bills," he said.

Former BiFab workers have been campaigning to bring contracts to the Fife yards

PA BiFab workers — Former BiFab workers have been campaigning to bring contracts to the Fife yards

BiFab, an engineering firm, builds large-scale equipment for the offshore oil and gas industry, as well as platforms for offshore wind turbines and tidal generators.

Hopes were raised that its future had been secured when it was bought by Canadian company DF Barnes in April last year with Scottish government support.

But difficulty in attracting new contracts and completing work on the Beatrice offshore wind farm have hampered the yards.

One of the biggest current opportunities for BiFab lies just nine miles off the Fife coast in the form of the Neart na Gaoithe wind farm, being developed by energy giant EDF, which would see dozens of turbines built.

However, fears remain the bulk of this work will go to fabrication yards overseas.

Reports last month suggested the BiFab yards would get work for eight of the Neart na Gaoithe wind farm project's 53 jacket foundations, creating 200 jobs, but unions described it as a "paltry return"

Getty Images BiFab plant — Reports last month suggested the BiFab yards would get work for eight of the Neart na Gaoithe wind farm project's 53 jacket foundations, creating 200 jobs, but unions described it as a "paltry return"

In December last year, Finance Secretary Derek Mackay said the Scottish government currently holds a 28% shareholding in BiFab, which can rise to a maximum of 38%.

Any further loans and conversion to equity than the £19m handed over so far will be stated in the Scottish government's 2018-19 accounts, usually published in September.

This will also cover taxpayer-funded loans to Glasgow Prestwick Airport and the Ferguson Marine shipyard in Port Glasgow.

Value of loan reduced

In a freedom of information response from December last year about the BiFab loan, Audit Scotland said: "We reassessed the valuation of the loan and our audit judgement was that the valuation of the loan was impaired by £13m, resulting in a net valuation of £6m.

"Our assessment was based on the amount converted to equity and an estimation of the value of that equity stake".

An Audit Scotland spokesman said the valuation of any further loans to BiFab, and to any other private firm, is being considered as part of its scheduled review of the Scottish government's consolidated 2018-19 accounts.