Ferry Contracts

– in the Scottish Parliament on 19th January 2023.

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Photo of Paul Sweeney Paul Sweeney Labour

4. To ask the Scottish Government what economic analysis it considered prior to awarding ferry contracts reportedly worth £115 million to a shipyard in Turkey. (S6O-01791)

Photo of Jenny Gilruth Jenny Gilruth Scottish National Party

The long-term economic benefits of that investment will be derived from the improvements to the ferry services for Tarbert on Harris and Lochmaddy on North Uist. Increases in vehicle capacity, of more than 40 per cent in summer and more than 10 per cent in winter, will support sustainable growth on our islands. The vessels will also provide significant benefits in reliability and resilience across the wider west coast routes.

In line with the relevant procurement legislation, the contract was awarded following an open tendering process by Caledonian Maritime Assets Ltd as the procuring authority. The bid that was received from the yard represented best value for money in quality and price.

Photo of Paul Sweeney Paul Sweeney Labour

The glaring omission in that answer was about the impact on the Scottish shipbuilding industry.

When I asked a written question about what weighting is applied to foreign shipbuilders as against domestic shipbuilders, the Scottish Government told me that it scores foreign and domestic shipbuilders in the same way on social value and other criteria. Therefore, an apprenticeship that is created in Turkey weighs the same as an apprenticeship that is created in Greenock. That is absurd, given that analysis shows that every pound that is spent on domestic shipbuilding returns a 35 per cent benefit to the local economy and supply chains in Scotland.

Does the minister not realise how foolish that approach is and that continuing with it will result in the terminal decline of shipbuilding in Scotland, given that most foreign shipbuilders are heavily subsidised by their Governments and are therefore able to submit bids that domestic shipbuilders are simply unable to compete with?

Photo of Jenny Gilruth Jenny Gilruth Scottish National Party

Paul Sweeney touched on a number of points in his question, and I recognise that he has also asked several written parliamentary questions, which, I believe, I have responded to.

When it comes to the vessels themselves, the relevant procurement legislation has been adhered to. To my mind, the most important challenge at the current time is in bringing that additional capacity to the Western Isles, in particular, and to CalMac Ferries. We have to provide additional capacity.

I am proud that, in the past year alone, we have been able to confirm that there will be two new additional vessels for Islay. We have the additional vessel on the Oban to Craignure route—MV Loch Frisa. At the end of last year, I confirmed the additional vessels to which the member has alluded. The bid that was received from that yard represented the best value for money in quality and price.

The two vessels that are in construction at the yard, which I announced earlier last year, are progressing well and remain on time and within budget. CMAL’s recent confirmation of signing the contract for the additional two vessels, at the same design specification and with the same yard, follows the recent procurement exercise to which the member has alluded—but that also includes a full builder’s refund guarantee.

The most important point in all of this is that we deliver that extra capacity to CalMac to allow it to provide a more sustainable service to the Western Isles, in particular.

The Deputy Presiding Officer:

There are two supplementary questions, but they will need to be brief, as will the answers.

Photo of Jenni Minto Jenni Minto Scottish National Party

I remind Labour members that it was the SNP that took action to save Ferguson’s shipyard from closure.

As the minister has just highlighted, the new ferries will increase capacity and resilience for islanders. The investment is therefore welcome news for islanders and businesses. Does the minister share my view that, instead of seeking to score political points, we should all focus on the real differences that the vessels will make to the lives of the people who rely on them?

Photo of Jenny Gilruth Jenny Gilruth Scottish National Party

I absolutely do. Ms Minto is right to highlight our intention in respect of the vessels and the benefits that they will bring to our island communities and the businesses that they will serve. The challenges have been well rehearsed in the chamber in recent months, so we should all welcome this investment from the Scottish Government.

Consider the progress made in the past 12 months: we now have four additional major vessels on order or under construction, in addition to the two major vessels under construction at Port Glasgow. The Scottish Government remains absolutely committed to improving our lifeline ferry fleet and better meeting the needs of our island communities.

Photo of Willie Rennie Willie Rennie Liberal Democrat

If there is one thing of which the minister should not be proud—as she put it—it is the construction of ferries for the Western Isles. She should be ashamed of what has happened rather than proud of it.

Were there any clauses in the contract with Cemre Shipyard stipulating that Scottish businesses should form part of the supply chain?

Photo of Jenny Gilruth Jenny Gilruth Scottish National Party

I answered the question in relation to procurement, which is the wider point of Mr Rennie’s question, in my response to Mr Sweeney’s question.

In relation to Ferguson’s more generally, we know that the yard is actively pursuing opportunities for future vessel contracts. As a shareholder and as a Government, we will do all that we can to help the yard to secure those opportunities, but decisions on what vessel contracts to bid for are a matter for the yard management and the board itself.