A nationalised shipyard has revealed the pandemic has added an additional £4.3m to the cost of two over-budget ferries.
Ferguson Marine in Port Glasgow had to suspend working on the ferries for four months, which amounted to £3.3m. It was then closed for another four weeks in January, which added an additional £1m to the total loss.
Tim Hair, appointed by the government ministers as the turnaround director for the nationalised shipyard, revealed the figures in a letter to the rural economy and connectivity committee, after providing an estimate during a Parliamentary session last week.
He believes the firm is still on target to deliver the Glen Sannox ship between April to June next year, after publicly seeking new workers on seven days a week shifts to complete the ships and make up for the lost time.
The two ferries were expected to enter service in 2018/19, destined for CalMac’s Arran and Skye and Outer Hebrides routes, but have been subject to repeated delays.
The delays will cost the public purse more than twice the original £97m fixed price contract. The business was taken over by the Scottish Government in 2019 after it went into administration.
The shipyard’s new management drew up a programme of remedial work to complete the ships, which will cost an extra £110m to £114m.
Hair said the remedial work remained on budget and the pandemic shutdowns are being treated as “exceptional costs”.
He told the committee: “The exceptional costs figure that we published in August for the previous lockdown was £3.3 million. We suspended production on the ferries and that was for roughly four months of full lockdown.
“My chief financial officer is working through the final figure for the recent suspension – we suspended for four weeks, so I think that it will be pro-rated down.”
Hair added during the meeting that the coronavirus has placed pressure on the delivery timescales, but they were still achievable, stating the Glen Sannox would be delivered for June 2022 at the latest, with the second ship being delivered by February 2023.
He pointed out that 80% of the design work was now signed off by regulators.
“It would be fair to say that, as a result of all those changes happening in such a short time, there are teething problems as some of the processes fit together and we get the right information and the right equipment in the right place for the work, but overall a lot of those process-based foundations and design-based foundations are coming to fruition.”
However, the scheme is relying heavily on the successful recruitment of the 120 extra skilled workers – taking the total to 500 – and move the yard to seven day working from 19 March.
It has currently had 190 applications so far, with 40 being identified as having the relevant skills – and is hoping to hire UK-based workers.
But, Hair admitted that if these don’t work out, then the firm will have to look at subcontractors or through direct employment of foreign workers, as any delays could affect the delivery schedule.
Hair added that the business has made “excellent progress in establishing a design office”, with a new head of engineering hired, and he is hopeful the yard can take work from next spring.
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