'No legal route' for more support for BiFab

The Scottish and UK governments have agreed they cannot give a £30m contract guarantee to a troubled engineering firm under existing subsidy rules.

The governments concluded they must look at other ways to secure the future of BiFab's yards, in Fife and Lewis.

The Scottish government said the main shareholder, a Canadian firm, refusing to provide finance, guarantees or investment was the key issue.

But it has claimed its role was to manage - not finance - the projects.

The troubled engineering firm has been unable to secure contracts for offshore wind farms.

Scottish ministers have committed more than £50m to the three fabrication yards, with the Scottish government owning more than a third of the business.

But state aid rules mean ministers are unable to bail out the struggling firm, with a joint working group now being formed to consider future opportunities for the renewables supply chain in Scotland.

The Scottish government's economy secretary, Fiona Hyslop, said matters were not helped by the firm's Canadian-based owner JV Driver, which acquired BiFab in April 2018 after the Scottish government rescued the company in 2017.

Ms Hyslop added that both governments would now attempt "to secure a new future for the yards in Fife and the Western Isles".

She said: "The Scottish government has been working for more than three years to support BiFab, we have left no stone unturned in our search for a solution to the challenges faced by the business.

"As a minority shareholder, we have been exhaustive in our consideration of the options available to us to financially support BiFab from public funds.

"The Scottish government has been clear that state aid regulations are a barrier to us providing guarantees on the contract from Saipem to build foundation jackets for the Neart na Gaoithe (NnG) project."

Ms Hyslop added that the UK government had similarly concluded that there was no legal route for it to provide support.

She added: "The situation at BiFab is a culmination of a number of issues, the main one being the unwillingness of the parent company and majority shareholder JV Driver to provide working capital, investment or guarantees for the company.

"We will explore options for the future of these sites and, through this new working group, work with the UK government to strengthen the renewables and clean energy supply chain."

Scottish Labour's economy spokesman Alex Rowley labelled the decision as "a devastating blow for the renewables industry and for jobs in Scotland".

"There has been a complete failure from both the UK and Scottish government to support jobs and to support the development of the renewables sector in Scotland," he said.

"I once again call on the Scottish government to publish the legal advice that led them to make a judgment to pull the guarantee."

He added: "There is no point of the SNP talking up a just transition when there are no jobs to transition.

"This is devastating for Scotland and should not be accepted. The SNP's commitment to jobs isn't worth the paper it was written on."

And the Scottish Greens' Mark Ruskell said: "Time and again we're told that state aid rules are the reason that the Scottish government cannot take a greater stake in the company, yet we know that other European countries strategically invest in the energy market all the time.

"If Scotland is to benefit from our enormous renewable energy potential, we need to see bolder action from government."

In a joint statement from GMB and Unite, secretaries Gary Smith and Pat Rafferty called for the Scottish government to publish its legal advice.

They added that union members learned of the developments in the media, which "makes a mockery of the so-called fair work agenda".

The statement continued: "The demise of Scotland's best shot at building a manufacturing supply chain for offshore wind is down to a decade of failure from successive SNP and Tory governments."

STUC deputy general secretary Dave Moxham said forming a working group "is the thinnest of gruel".

He added: "The abject failure of both governments to do anything to support Scottish workers - despite the 'Saudi Arabia of renewables' boast of each - is on show for all to see."