Tycoon and FM adviser McColl talks of comeback and end to ScotGov control on ferries

JIM McColl, one of Scotland’s wealthiest men, has said he would be willing to make a return to the helm at the firm at the centre of a shipbuilding fiasco but says Scottish Government-controlled ferries operation needs to end.

The tycoon who owned the embattled shipyard firm Ferguson Marine Engineering Ltd (FMEL) which was nationalised after it fell into administration two years ago, says Caledonian Maritime Assets Ltd (CMAL), the Scottish Government-controlled taxpayer-funded company which owns and procures ferries is “not fit for purpose” and should be scrapped.

He said CMAL should not be allowed to have a free hand by ministers to make “more mistakes” saying they are “just not competent”.

At the centre of the debacle is two lifeline island ferries MV Glen Sannox and Hull 802 which are still languishing in now state-owned Port Glasgow shipyard, with costs of their construction more than doubling from the original £97m contract, while the delivery of the vessels which were due online in the first half of 2018 is over four years late.

The ferries contract was plagued by design changes, delays and disputes over cost, with CMAL and Mr McColl, who is one of Nicola Sturgeon’s own economic advisers, blaming each other.

Mr McColl, who rescued Ferguson from receivership in September, 2014, has said that the secret deals by ministers to bring about nationalisation prevented any third party buyer coming in to buy FMEL – including himself.

But he said he would still be keen to make a return.

Revealed: Ministers lose £60m of public funds in bailout of Ferguson Marine

“I have had loads of people on to me about a return,” he said. “That’s not going to happen because the government won’t allow it to happen right now.

“But were there an opportunity, I would gladly do it again. Because I think there is a great future there.”

But he told the Herald on Sunday there would have to be changes in the way ferries are run in Scotland – which is Scottish Government-controlled.

HeraldScotland:

There has been criticism of the “closed group” of bodies overseen by ministers involved with ferries from Transport Scotland as funders, CMAL as vessel owners, and ferry operators CalMac.

Competition watchdogs have already warned about the “potential risks” of state control over the way ferries are operated, run and paid for in Scotland.

They say there are dangers of Ferguson Marine being awarded work without a competitive tender process, saying “it is unlikely to make it a commercially sustainable business” and “it may also have a negative impact on the wider industry”.

Mr McColl said the criticisms of CMAL after the failure to secure a lifeline ferry at a fraction of the cost of the delayed vessels showed the body should be scrapped.

Negotiations had been taking place to secure an Indonesia-built vessel for months to secure the ferry before the ‘summer of chaos’ across Scotland’s ageing ferry network.

But it fell through after it was claimed CMAL made an “incredible” move to have the overseas owners fork out for the official approvals for any modifications to make it suitable for Scottish waters which would have cost no more than £100,000.

Scots ex-pat Ken MacArthur, the commercial lead for Sealease, the Hong Kong based company selling the catamaran criticised the handling of the failed potential purchase by CMAL who he believed were never serious in completing a sale.

“No competent international seller would ever proceed on the basis CMAL proposed,” he said.

READ MORE: Ex-Ferguson Marine chief says nationalisation ‘rescue’ of ferry fiasco firm is nothing of the sort

Mr McColl, once a supporter of the Scottish Government’s policy of independence for Scotland, but who now says he now has no political leanings said: “This is not a turnaround, it is a pretence.

“You can see the criticism from the island ferry seller, they are just asking for things that are just not done in the industry. This is what happened with us.

“And they intentionally used the term turnaround director to give the impression that there was something gone wrong in the yard and the only thing that had gone wrong was that they had not paid for the work that they had been asking to be done.

A member of of the First Minister’s Council of Economic Advisers, he has previously questioned the legality of the actions of ministers who oversaw the waiving of £25m of taxpayers money to allow a controversial nationalisation of his financially troubled Ferguson Marine.

The ‘lost’ £25m related to a bond from HCCI, a subsidiary of Texas-based insurance firm Tokio Marine which ensured that should Ferguson enter into administration, meaning it was unable to deliver the two ferries, CMAL would receive the money to enable completion of the vessels.

HeraldScotland:

“I begged [the finance secretary] Derek Mackay to intervene and enable an expert determination process and he said he couldn’t do it,” he said. “I asked him why. He ushered everyone else out the room, there was just he and I in it, and he said that they had legal letters from CMAL threatening that if they interfere with them, as an independent board, they will resign en-masse and it would be bad publicity for the government, so we can’t do anything with them.

“What is so bad that they were scared to confront, or even do the sensible thing and that is to insist an independent mediation or arbitration as their own expert asked them to do.

READ MORE: Ministers’ Ferguson Marine ferry fiasco fixer is paid £1.3m over nearly two years

“Even with this latest offer they have had for the new ferry, the way CMAL are acting is they are just not competent in what they are doing, according to the feedback with these people and that is what we found when dealing with them as well.

“I don’t know what it is going to take for people to face up to the fact that something needs to be done. The worrying thing is they are in the process of procuring the Islay ferry. How they can let CMAL have a free hand to do that with all the mistakes that have been highlighted to the government.

“In my view CMAL are not fit for purpose.”

He said it was not a healthy situation with the Scottish Government controlling all aspects of ferries.

“This is a very unproductive yard right now and is not competitive, it won’t be able to compete for third party work. “If you put future ferries in their from the government, you will have a very inefficient and expensive process, because it is not being run by people with good experience in shipbuilding.”

He said that the ferries debacle needs to be investigated properly with an independent judicial inquiry.

HeraldScotland:

Last week, the Herald on Sunday revealed that Teneo, who have acted as administrators of Ferguson Marine, dropped a claim of £48.3m first made by the former owners of the yard against CMAL over the contractual dispute over the rising costs.

If would have meant more cash to pay those owed money from Ferguson’s financial collapse, which including the £5.95m owed to 168 unsecured creditors.

It is understood that ministers took an unpublished “independent legal view” of the claim and found that it could not intervene in the commercial dispute.

READ MORE: Revealed: Ministers’ secret path to the controversial state takeover of Ferguson Marine

Mr McColl, who lodged a complaint about the decision, said: “The Scottish Government are paying CMAL’s bill. They are hiding by paying for this, the actual mess that CMAL have made, because if this was a commercial entity, they would be hit with the additional costs here, but they are getting off scot free.

“It needs to be properly investigated.

“The one thing the Scottish Government do really well is political propaganda. You have got to admire them for it.

“They have a slick machine, but that’s wrong. They should be facing up to the real challenges and fixing them.”

A spokesperson for CMAL said: “Mr McColl’s claims regarding CMAL are baseless. There is extensive evidence available online regarding our position on these matters.

“There was a parliamentary inquiry into the dual fuel vessels contract, and the report was critical of all parties involved. Our focus is now firmly on the future and expediting plans to renew and transform the ferry fleet and harbour network with a £580 million commitment from Scottish Government over five years to 2026.”

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992