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Chamber and committees

Public Audit Committee


New Vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802

Background

On 23 March 2022, the Auditor General for Scotland published New Vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802.

The report says:

"The project to deliver two new dual-fuel ferries for the Clyde and Hebrides has been fraught with problems and delays for over six years. Vessels 801 and 802 were originally expected to be delivered in May and July 2018 respectively, and are now almost four years late. The total cost of the project is currently estimated to be at least £240 million, which is 2.5 times the original vessels’ budget. In February 2022, Ferguson Marine (Port Glasgow) Limited (FMPG) informed the Scottish Parliament of further delays to the vessels. It expects to provide an update on timescales, and any impact on costs, at the end of March 2022. FMPG will need to address significant operational challenges to deliver the vessels within the new timescales."

Read the report on Audit Scotland's website

Information about the Public Audit Committee's consideration of the report can be found below. 

Meetings

 

21 April 2022

The Committee took evidence from:

Stephen Boyle, the Auditor General for Scotland; Antony Clark, Interim Director of Performance Audit and Best Value; Angela Canning, Audit Director; and Gill Miller, Audit Manager, Performance Audit and Best Value, Audit Scotland.

Read the agenda and meeting papers, 21 April 2022

Read the Official Report, 21 April 2022

Read the meeting minutes, 21 April 2022

Decision: The Committee agreed to take further evidence from the Auditor General for Scotland at a future meeting.

28 April 2022

The Committee took evidence from:

Stephen Boyle, the Auditor General for Scotland; Antony Clark, Interim Director of Performance Audit and Best Value; and Angela Canning, Audit Director, Audit Scotland.

Read the agenda and meeting papers, 28 April 2022

Read the Official Report, 28 April 2022

Read the meeting minutes, 28 April 2022

Decision: The Committee agreed to invite the Scottish Government and Transport Scotland to give oral evidence at a future meeting.

19 May 2022

Decision: The Committee agreed at its meeting on 19 May 2022 to invite the current Chief Executive and former Chair of Caledonian Maritime Assets Limited to give oral evidence at a future meeting. It also agreed to invite the Director and Chief Executive of Fergusson Marine Engineering Limited to give oral evidence, on a separate panel, at a future meeting.

The Committee agreed to seek written evidence from the former Chief Executive of Transport Scotland, the former Director-General for Enterprise, Environment and Innovation and the former Minister for Transport and Islands, Scottish Government.

26 May 2022

The Committee took evidence from:

Roy Brannen, Interim Director-General Net Zero; Colin Cook, Director of Economic Development; Dermot Rhatigan, Deputy Director Manufacturing and Industries; and Mo Rooney, Deputy Director Strategic Commercial Interventions, Scottish Government; and

Hugh Gillies, Interim Chief Executive, Fran Pacitti, Director of Aviation, Maritime, Freight and Canals; and Chris Wilcock, Head of Ferries Unit, Transport Scotland.

Followed by:

Stephen Boyle, the Auditor General for Scotland; Angela Canning, Audit Director; and Gill Miller, Audit Manager, Performance Audit and Best Value, Audit Scotland.

Read the agenda and meeting papers, 26 May 2022

Read the Official Report, 26 May 2022

Read the meeting minutes, 26 May 2022

Decision: The Committee agreed to invite the Scottish Government and Transport Scotland to give further oral evidence at a future meeting. 

9 June 2022

The Committee took evidence from:

Colin Cook, Director of Economic Development; Dermot Rhatigan, Deputy Director of Manufacturing and Industries; and Mo Rooney, Deputy Director Strategic Commercial Interventions, Scottish Government; and

Hugh Gillies, Interim Chief Executive, Fran Pacitti, Director of Aviation, Maritime, Freight and Canals; and Chris Wilcock, Head of Ferries Unit, Transport Scotland.

Followed by:

Stephen Boyle, the Auditor General for Scotland; and Angela Canning, Audit Director, Audit Scotland.

Read the agenda and meeting papers, 9 June 2022

Read the Official Report, 9 June 2022

Read the meeting minutes, 9 June 2022

16 June 2022

The Committee took evidence from:

Jim McColl, Former Director, Ferguson Marine Engineering Limited.

Followed by:

Stephen Boyle, the Auditor General for Scotland; and Angela Canning, Audit Director, Audit Scotland.

Read the agenda and meeting papers, 16 June 2022

Read the Official Report, 16 June 2022

Read the meeting minutes, 16 June 2022

Decision: The Committee agreed to write to the Scottish Government and the administrators involved in the sale of Ferguson Marine Engineering Limited. 

30 June 2022

The Committee took evidence from:

Kevin Hobbs, Chief Executive Officer, Morag McNeill, Interim Chair; and Erik Østergaard, former Chair, Caledonian Maritime Assets Limited.

Followed by:

Stephen Boyle, the Auditor General for Scotland; and Gill Miller, Audit Manager, Performance Audit and Best Value, Audit Scotland.

Read the agenda and meeting papers, 30 June 2022

Read the Official Report, 30 June 2022

Read the meeting minutes, 30 June 2022

Decision: The Committee agreed to invite the former Chief Executive of Transport Scotland and the former Minister for Transport and Islands, Scottish Government, to give oral evidence at a future meeting. 

8 September 2022

The Committee took evidence from:

David Middleton, former Chief Executive, Transport Scotland; and then from

Derek Mackay, former Minister for Transport and Islands, Scottish Government;

Followed by;

Stephen Boyle, the Auditor General for Scotland; Angela Canning, Audit Director; and Gill Miller, Audit Manager, Performance Audit and Best Value, Audit Scotland.

Read the agenda and meeting papers, 8 September 2022

Read the Official Report, 8 September 2022

Read the meeting minutes, 8 September 2022

Decision: The Committee agreed to invite the First Minister to give evidence at a future meeting, and consider any further steps at its next meeting. The Committee also agreed to draft a report on the Auditor General for Scotland's section 23 report, New Vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802.

Decision: The Committee agreed at its meeting on 22 September 2022 to write to Stuart McMillan MSP, Keith Brown MSP, Caledonian Maritime Assets Limited and Transport Scotland in relation to its scrutiny of the Auditor General for Scotland's report, New Vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802. The Committee also agreed to visit Ferguson Marine (Port Glasgow) Limited.

Decision: The Committee noted correspondence received at its meeting on 3 November 2022, from Stuart McMillan MSP, Keith Brown MSP, Caledonian Maritime Assets Limited and Transport Scotland and agreed to write to Keith Brown MSP and the Auditor General for Scotland.

4 November 2022

The Committee took evidence from:

Rt Hon Nicola Sturgeon, First Minister, Scottish Government;

Followed by;

Stephen Boyle, the Auditor General for Scotland; and Antony Clark, Executive Director for Performance Audit and Best Value, Audit Scotland.

Read the agenda and meeting papers, 4 November 2022

Read the Official Report, 4 November 2022

Read the meeting minutes, 4 November 2022

Decision: The Committee agreed to write to the First Minister on issues raised during the meeting and agreed to consider a draft report at a future meeting.

Decision: At its meeting on 8 December 2022, the Committee noted correspondence received from the First Minister and agreed to write to the First Minister and Transport Scotland.

Decision: At its meeting on 15 December 2022, the Committee agreed to close the period for written submissions as it moves into its report consideration phase and also agreed to seek information from Ferguson Marine (Port Glasgow).

Decision: At its meeting on 22 June 2023, the Committee agreed to invite the Minister for Transport to give oral evidence at a future meeting.

Decision: At its meeting on 7 September 2023, in relation to its scrutiny of New vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802, the Committee noted correspondence from the former director of Ferguson Marine Engineering Limited dated 11 May 2023 and the Director-General Economy dated 7 July 2023. The Committee also considered correspondence from the Auditor General for Scotland on 21 August 2023 and agreed to write to the Scottish Government. The Committee also noted correspondence from the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy dated 30 July 2023 and 23 August 2023 in relation to updates on Glen Sannox, Hull 801 and Hull 802 provided by Ferguson Marine Port Glasgow (Holdings) Limited.

21 September 2023

The Committee took evidence from:

Fiona Hyslop, Minister for Transport; Colin Cook, Director of Economic Development, Scottish Government; Alison Irvine, Interim Chief Executive; and Chris Wilcock, Head of Ferries Unit, Transport Scotland.

Followed by:

Stephen Boyle, the Auditor General for Scotland and Mark Taylor, Audit Director, Audit Scotland.

Read the agenda and meeting papers, 21 September 2023

Read the Official Report, 21 September 2023

Read the meeting minutes, 21 September 2023

Decision: The Committee will consider its next steps at a future meeting.

Decision: At its meeting on 26 October 2023,  in relation to its scrutiny of new vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802, the Committee considered correspondence from the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, dated 29 September 20323 and 4 October 2023 and agreed to write to the Cabinet Secretary. The Committee also considered correspondence from the Minister for Transport and agreed to write to the Minister.

The Committee considered the report titled "Procurement of vessels 801 and 802: Allegations of fraud" prepared by Barry Smith KC and published by Caledonian Maritime Assets (CMAL) and agreed to write to CMAL, the Scottish Government and Transport Scotland. 


Engagement

On Monday 31 October 2022 we visited Ferguson Marine (Port Glasgow) Limited to engage directly with the workforce and trade union representatives about their experiences of constructing vessels 801 and 802. What we heard is summarised in the following anonymised note:

Correspondence


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