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Sturgeon faces inquiry questions on ferry scandal FM denies ferry contract was 'jobs for the boys'
(31 minutes later)
Nicola Sturgeon launched Glen Sannox in 2017, when the yard was owned by Jim McColl, but the ship is still not finished. "Categorically" not a "jobs for the boys" element in the awarding of ferry contract
Nicola Sturgeon is to give evidence to MSPs investigating the delays and huge cost overruns in the construction of two new CalMac ferries. "Categorically" not a "jobs for the boys" element in the awarding of ferry contract
Holyrood's public audit committee is following up on a damning Audit Scotland report. Nicola Sturgeon has said she "completely and utterly" refutes suggestions of political interference in the award of an ill-fated ferry contract.
The ships are five years late and could end up costing more than £300m. She was asked if the award to someone with a known relationship with the government was "jobs for the boys".
The first minister has previously said that while former transport minister Derek Mackay approved the deal, the "buck stops" with her. The first minister insisted there was "absolutely, categorically" nothing untoward in the procurement process.
The £97m "fixed price" contract was awarded to Ferguson shipyard in Port Glasgow in 2015, a year after it was rescued by businessman Jim McColl, a prominent SNP supporter who sat on the first minister's council of economic advisers. MSPs are investigating delays and overspends over two CalMac ferries.
Dossier suggests ferry deal may have been rigged The the construction project at Ferguson shipyard in Port Glasgow is five years behind schedule and could end up costing the public purse more than three times the original £97m "fixed price contract" price.
Ms Sturgeon was giving evidence before the public audit committee following a damning report from Audit Scotland which listed "multiple failings" in the process.
The contract was awarded in 2015 to the Ferguson Marine Engineering Ltd (FMEL) shipyard in Port Glasgow, a year after it had been rescued from administration by Jim McColl, a pro-independence businessman who sat on the first minister's council of economic advisers.
Ferries deal awarded without financial safeguardsFerries deal awarded without financial safeguards
The build for the two ships, Glen Sannox and the unnamed Hull 802, soon ran into trouble, with the yard going back into administration again in 2019. Conservative MSP Sharon Dowey asked if the award to a firm owned by Mr McColl was a case of "jobs for the boys".
It was later nationalised but neither ferry has yet been delivered. Ms Sturgeon responded: "If you are saying was there anything untoward in this procurement process in order to somehow inappropriately steer this contract towards FMEL, then absolutely, categorically not."
The Glen Sannox ferry has still not been delivered She said she naturally was happy for work to go to a Scottish company which would secure Scottish jobs - but it was important that this was done "by the book".
An Audit Scotland report in March identified "multiple failings" including the lack of a "full builders guarantee", a standard feature of major shipbuilding contracts which protects the buyer if things go wrong. And she insisted the award was made solely on the assessment of the bids by government owned ferry agency CMAL.
It also criticised a lack of record keeping on why the decision was made. Glen Sannox was due for delivery in 2018, but latest estimates are that it will be ready next spring
The Scottish government later published emails that confirmed Derek Mackay approved the deal, but in Holyrood exchanges Ms Sturgeon said that as first minister she took ultimate responsibility. Ms Sturgeon accepted that a recent BBC documentary which presented evidence that FMEL was given preferential treatment in the procurement process had raised "serious issues" that should be investigated further.
She said: "The buck stops with me and I have never tried to shy away from that on any issue. I am not defending the cost overruns or the delay to the construction of these ferries, it is completely unacceptable." However she said was personally not aware of any impropriety.
Derek Mackay was transport minister when he approved the contract award The Disclosure programme found that FMEL was allowed to substantially alter its design and price after the tender deadline, and had access to a key CalMac specification "wishlist" that was not available to rival bidders.
Dossier suggests ferry deal may have been rigged
The first minister was asked why then transport minister Derek Mackay approved the final award of the contract to FMEL in October 2015 despite serious misgivings by the CMAL board about the level of financial guarantees being offered.
She said that various mitigations had been sought to reduce the risk and based on what information was available to him at the time she thought it was a "reasonable decision".
She said: "To be fair to Derek Mackay, had that 8 October [documentation] been brought to my attention, based on everything that was in that, I am not saying I would have reached a different decision - I don't think I would have done - but perhaps with hindsight it should have been brought to my attention."
Mr Mackay, who left government in 2020 over messages he sent to a 16-year-old boy on social media, appeared before the public audit committee in September.Mr Mackay, who left government in 2020 over messages he sent to a 16-year-old boy on social media, appeared before the public audit committee in September.
He said he also took responsibility, but that he believed at the time that some of the financial risks had been mitigated by other means. Derek Mackay was transport minister when he approved the contract award
Since then, a BBC investigation has revealed a dossier of leaked documents which suggest the procurement process may have been rigged in favour of Jim McColl's company, Ferguson Marine Engineering Ltd (FMEL). At the start of the hearing, committee convener Richard Leonard questioned the government's commitment to transparency over the ferry fiasco.
The BBC's Disclosure programme found evidence that FMEL was allowed to substantially modify its bid and reduce its price after the tender deadline, and that it had access to a key specification document that was not available to rival bidders. He pointed out that a letter from Mr Mackay, submitted to the hearing by Transport Scotland appeared to have been "edited" to remove two key paragraphs relating to financial guarantees.
The government's ferries agency CMAL has said it found no evidence in its files to support the BBC allegations, and has defended the procurement process. The first minister insisted her government was committee to openness, and that she believed the issue of the letter was imply a "formatting" error.
She pointed out that a full version of the same letter had been submitted by SNP MSP Stuart McMillan, who was its recipient.
The first minister said she would look into publishing more documentation including a record of a meeting with Jim McColl in May 2017 at which he raised concerns about the way the project was progressing and the role of the government ferries agency CMAL.