An extra £20m to complete one of delayed CalMac ferries

There' also a £4m contingency fund in place

The already over budget MV Glen Sannox

Published 30th Jun 2023

The shipyard building two new ferries for CalMac has told MSPs the cost of completing one of the vessels has risen by £20 million.

David Tydeman, chief executive of Ferguson Marine in Port Glasgow, said the cost of completing the Glen Sannox was now estimated to be £114 million, plus a £4 million contingency.

That is up from the previous forecast of a £94.8 million final bill, with an additional £2.7 million contingency.

Wellbeing Economy Secretary Neil Gray said he was "extremely disappointed" to learn of the rise.

Mr Tydeman said "good positive progress" was being made on both the Glen Sannox and the second ferry being constructed at the yard, the as-yet-unnamed Hull 802.

In a letter to MSPs on Holyrood's Net Zero, Energy and Transport Committee, he said the yard "remain targeted at staying within the £105.1 million budget for 802".

He also said that subject to "positive progress with final snagging and trials", the first of the ferries, the Glen Sannox, "should be available for passengers in spring 2024".

The rise in costs for the Glen Sannox was linked to the replacement of some items, "some which are proving very difficult to resolve", modifications to the steel work and costs from sub-contractors.

MSPs on the committee have already said that Scotland's island communities face an "existential threat" without clear leadership in the ferry crisis.

CalMac's ageing fleet of vessels has come under increasing pressure, with issues with reliability and some services cancelled.

The state-owned ferry operator is waiting for delivery of the two new vessels from Ferguson Marine, but the ships are years late and massively over budget.

After details of the rise were disclosed, Mr Gray, who recently had to give ministerial authority for Ferguson Marine to continue to work on Hull 802 after a report found doing so would not be value for money, said he had "made it repeatedly clear" that he expected the shipyard to "do everything possible to minimise costs and ensure that these vessels enter service as soon as possible".

In a letter to the Net Zero, Economy and Transport Committee and the Public Audit Committee, which has been examining issues with the construction of the ships, the cabinet secretary said: "I am, of course, extremely disappointed by the projected increase in costs, and share the very real concerns that our island communities, in particular, will feel as a result of his update."

He added: "I do, of course, accept that there are inflationary pressures in the wider economy and inherent risks around the delivery of first-in-class vessels, particularly when FMPG (Ferguson Marine Port Glasgow) are wrestling with the consequences of design decisions taken some time ago under previous ownership.

"However, I expect the management of the yard to bear down on these costs and to continue working with my officials to scrutinise expenditure and report performance in an open and transparent way."

Mr Gray added: "For the avoidance of doubt, this update does not change the decision I announced recently to continue building the two vessels at FMPG.

"This includes my decision to issue a written authority in relation to vessel 802, which was based on the interests of our island communities and the wider social and economic benefits to the area around Port Glasgow."

Scottish Conservative transport spokesman Graham Simpson said: "The SNP's ferries scandal continues to haemorrhage taxpayers' money at a bewildering rate, while betrayed islanders are kept waiting for lifeline vessels that are already six years late."

He added: "Every update from David Tydeman seems to involve another cost increase for one or both of these ferries and this latest £20.5 million rise takes the total public liability for the two ferries to an astonishing £358.5 million."

He claimed that a "sheepish" Mr Gray had "slipped out" news of the rise in letters published the day after Holyrood went into recess for the summer.

Mr Simpson added: "The immediate priority is getting these vessels in service asap with as little possible further damage to the public purse."

Hear the latest news on Clyde 1 on FM, DAB, smart speaker or the Rayo app.