02 February 2021

S5M-24025 Construction and Procurement of Ferry Vessels

The Deputy Presiding Officer (Christine Grahame): The next item of business is a Rural Economy and Connectivity Committee debate on motion S5M-24025, in the name of Edward Mountain, on an inquiry into the construction and procurement of ferry vessels in Scotland.

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Stewart Stevenson (Banffshire and Buchan Coast) (SNP):

We would not be here today if the project manager and their office had conducted their activities in relation to the construction of vessels 801 and 802 at Ferguson Marine to anything approaching normal professional standards. That was not a mere contributory factor. I make that observation as someone who has run projects of similar financial scale and collections of projects multiple times the scale of this project.

The contract and processes around procurement were industry standard, had worked previously and are used not just in Scotland but widely. However, the response of those in charge of procurement to the project manager’s failure was inadequate and substantially contributed to our being where we are today.

Did CMAL know about the project manager’s failures early enough to have intervened to minimise the damage? My conclusion is that it almost certainly did. Did the complexity of the procurement structure, which involved CMAL, Transport Scotland and the Government, contribute to the problem? I am pretty clear that it was more complicated than it needed to be. However, the legal requirement to have such a structure ceased only at 23:00 on 31 December 2020. I have never said that leaving the European Union would not have some advantages, and that might just be one of them. I see that Graham Simpson is nodding his head in response to that.

Another question is whether, in providing financial assistance to Ferguson Marine, the enterprise agency should have informed CMAL and others that it was doing so. Here, I differ from the quite strongly held views of Edward Mountain—I hope that I am not misrepresenting him—in saying that it should not have told them. However, although it was not told by the funder, through proper oversight of the project, CMAL should have known by other means. Why? In providing support to a commercial company, the enterprise agencies must not discriminate by favouring state companies over private sector ones. I heard Graham Simpson say that we should not be ploughing vast sums of money into private companies. That is unusual for a member who sits on the Tory benches, but there we are.

The whole point is that we have to be blind as to whether such a transaction involves a state company or a private sector one. There is nothing new about such a situation, which involves what are termed Chinese walls. I will tell members a little story from my own experience. In the 1980s, my spouse was part of a team of advisers to The Distillers Company Ltd when it was bidding to purchase the company that produced Bell’s whisky. One of the teams working for me was part of the Bell’s team on the other side of that takeover battle. Therefore, in our household, there was clearly a conflict between our respective professional interests. We applied the old saw,

“He that would keep a secret must keep it secret that he hath a secret to keep.”

My spouse and I discussed nothing about the matter and we knew nothing of each other’s involvement in it until, six months after the event, we were having lunch with someone who had been involved in the transaction and who raised the subject. That was the first time that either of us knew that we had been on opposite sides of a takeover battle on the stock exchange. That is how Chinese walls have to work, and so it must be for our enterprise companies when they work in that context.

Of course, examination of the accounts receivables and knowledge of what the business was getting its contracts for would have been important for CMAL.

I will conclude by saying that the primary failure definitely lay with the then management of the yard, but I think that CMAL could have done more. I say to the minister that I hope we will look at that aspect very carefully.


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