Thank you for the question. You are right to mention those three, and there are probably more: the supply chain has a role to play, as do unions.
The historical lack of investment, specifically at BiFab, can be fixed. It is not necessarily an issue that just requires the spending of money; it is about a mindset change.
That has really come through from our discussions with industry. Companies that have managed to compete in offshore wind, where they were not competing previously, have really moved forward. Smulders, which is a Belgian company, has a site in Wallsend, in Newcastle, which is held up as best practice. Smulders has invested not just money but time, knowledge and management practices, which has enabled that yard to do things that it would not have been able to do previously.
The investment of not just money but time and knowledge is required. Our hope is that DF Barnes will bring that wider knowledge and take BiFab beyond where it was previously.
There are also issues to do with financing and bonding, which we have not yet talked about. Contractors across all industries face those issues, but I will talk briefly about how they affect the offshore wind sector. An offshore wind project is a very, very large infrastructure project. For example, Beatrice is currently the largest private infrastructure project in the UK, at £2.6 billion. The companies that develop schemes cannot do so off balance sheet; they do not have the funds to do so. They must go out to the investment market to get the funds.
Investors are entirely focused on risk, and as part of the process of mitigating risk they want to work with people who have done similar projects, on a similar scale, in the past and who have the manpower, if you like, to deal with sometimes hundreds of contracts at once. That is why they very often ask developers to give over that risk, in effect, to a tier 1 contractor, as we have seen with Kincardine and Cobra Wind International, and with Beatrice.
What is often neglected is the finance element. If there is a role to play, it is to make the financiers more comfortable with the risk and to present to them the correct impression, which is that the lack of sight of a pipeline of offshore wind in the UK is broadly solved now. We know that we will have to more than double the offshore wind that we have by 2030, so there is now a pipeline of predictability. The finance community needs to understand that. If we can deal with how the finance community views risk and how it views investing in Scottish projects, there is mileage to be made.
As a shareholder in BiFab and in Scotland plc, Government has a role to play. It is a job for everyone, but we will see contracts being awarded at a sizable scale only when a lot of those elements come into play together.