Ferguson Marine offered lifeline with potential contracts for four vessels including two electric ferries

If confirmed, the announcement on Tuesday would provide the Port Glasgow yard with crucial orders after it missed out on the first electric ferries contract and has nothing on its books after the hugely-late and over budget Glen Rosa ferry is due to be completed by the end of the year.

It follows The Scotsman’s report that the yard was in the running for the next tranche of the so-called small vessel replacement programme after missing out on the first order in 2024. An order for a third ferry may follow.

The Scottish Government firm which buys ferries for CalMac had told The Scotsman it would trust Ferguson Marine to build such ferries because it had successfully completed similar sized vessels over the last 20 years.

Ministers said the proposed contracts would also unlock the remainder of the £14.2 million they have pledged to upgrade the yard to improve productivity and streamline production. Only £600,000 has been agreed so far.

However, Ferguson Marine’s hopes of also landing a direct award to replace the large CalMac ferry Lord of the Isles - which it built - were dashed because Transport Secretary Fiona Hyslop said the contract would go out to competition.

She also told MSPs that negotiations for the Scottish Government’s purchase of Ardrossan harbour in North Ayrshire had been completed, with the deal due to be completed this month.

That will enable its upgrade to proceed to accommodate new CalMac ferries Glen Sannox and Glen Rosa for the main route to Brodick in Arran - one of the operator’s busiest. Glen Sannox has to sail on the longer route from Troon instead.

Ms Hyslop said the electric ferries would serve the Sound of Harris between the island and North Uist, and the Sound of Barra between that island and South Uist.

However, she said a direct award would be subject to an assessment of competition concerns, which was used by ministers to justify not placing an order with the yard for the first seven electric ferries.

Liberal Democrat transport spokesperson Jamie Greene questioned what had changed to allay past concerns that legal difficulties over such a move could delay the process.

Ms Hyslop said the order would form the second phase of the small vessel replacement programme “as part of a wider suite of publicly funded and directly awarded vessel projects”.

She said: “This proposal is subject to a detailed internal due diligence process that is underway to assess viability, including examination of structural organisation matters and subsidy control.

“Engagement with the Competition and Markets Authority would also be among the steps required before any formal contract award decisions could be made.”

“Separately, I can also announce that Cmal [Scottish Government ferry-buying firm Caledonian Maritime Assets Limited] will now move to the open market competitive procurement of the replacement for the Lord Of the Isles in the next few weeks with a view to placing an order with a shipyard later this year.”

READ MORE: Failure to win 7 ferries contract a red herring for Ferguson Marine's survival

Meantime, Deputy First Minister Kate Forbes said the Scottish Government would also directly award two further vessels as a “bridge to the future” which would keep it busy for the next five years.

They are replacements for its marine research vessel Scotia, which the yard completed in 1998, and its marine protection vessel Minna, which was finished by the yard five years later.

The yard had lobbied for the work, as The Scotsman revealed last August.

Ms Forbes said: “This is a watershed moment. Fulfilment of the proposed programme, subject to due diligence processes to assess viability, would secure a pipeline of work and allow the shipyard to move ahead with its modernisation plans while pitching for additional orders on the open market.”

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Yard chief financial officer David Dishon said: “Securing a contract of this magnitude would be a significant step towards financial sustainability.

“We have navigated considerable headwinds over the past few years, but this direct award would allow us to turn a corner.”

Scottish Conservatives transport spokesperson Sue Webber said: “The awarding of this contract is good news for the Ferguson workforce and Scottish industry.

“However, given the disasters the SNP has presided over in the building of the Glen Rosa and Glen Sannox, many Scots will have serious concerns about these new vessels being delivered on time and on budget.”

Louise Gilmour, Scotland secretary of the GMB, the main union at the Ferguson Marine, said: “The work will allow the yard to turn the page and allow a skilled, committed and blameless workforce to begin restoring its worldwide reputation for excellence.

Roz Foyer, general secretary of the trade union umbrella body STUC, said: “Adopting an interventionist approach, with governments taking a direct stake in our national infrastructure, is the solid foundation required for a proper industrial strategy.”

Ms Hyslop also said a £107 million contract for redeveloping Port Ellen harbour in Islay would be awarded this week, with work due to start in the summer and expected to be completed in early 2029.

Ferries from the mainland are currently using Port Askaig on the island.

Jim Porteous, secretary of the Islay Community Council and Ferry Committee, said: “We hugely welcome the announcement of this much needed investment at Port Ellen.

“Islay punches above its weight in tax and revenue contribution for the economy and this will be a major boost in future proofing and sustainability.

“Regarding closure of the port, the old adage 'there is no gain without pain' comes to mind.

“The Islay road network is already in a parlous state due to underfunding, and we have requested additional funding to enable the roads to handle the extra traffic between north and south for the initial closure of Port Ellen and beyond.”