Why Ferguson Marine could have bid for new ferry contract

The latest row over ferry procurement has produced a flood of online claims about Ferguson Marine’s supposed inability to build two new vessels for the Northern Isles.

Much of the noise rests on false assumptions about the yard’s physical limitations.

On social media, one user claimed “the two ships going out to tender are different in size from Sannox and Rosa” while another insisted “their yard is physically too small. The slipway is too short for ships that size.” Others simply pointed to the delays with the Glen Sannox and Glen Rosa as proof Ferguson could not be trusted. Some went further still, suggesting Ferguson had been told not to bid to spare political embarrassment.

As Labour MSP Paul Sweeney highlighted, these arguments collapse under scrutiny. He reminded parliament that “the 305 metre Inchgreen Dry Dock is one mile west of Ferguson at Port Glasgow. This facility can be used for the final assembly of 140m Northern Isles ferries, with steel units transported from their shipyard.” The notion that Ferguson was physically incapable of delivering the ships does not stand up to inspection.

The real reason Ferguson did not submit a bid lies in the tender framework itself. The competition included no weighting for social value or local economic impact. With no mechanism to balance cost against the benefit of sustaining Scottish jobs and industrial capacity, the yard faced little chance against foreign rivals backed by state investment banks.

Sweeney told MSPs: “The heart of that strategy must be a change to Scottish public procurement law to include a mandatory social value weighting in tenders for shipbuilding programs, ensuring that Scottish ships are more likely to be built in Scotland.” He contrasted the Scottish Government’s approach, which only considers price and quality, with the UK Government’s National Shipbuilding Strategy that requires a minimum ten per cent social value weighting. “It means that Scottish firms are often not even bothering to tender for the work, in full knowledge that they cannot compete with the competitive ship building finance provided by state investment banks in Spain, Turkey, Poland and China.”

He added: “Why has the Scottish Government owned Ferguson Marine, Babcock in Rosyth or Harland and Wolff not in contention for this £200 million contract? The irony is that the only work keeping the lights on at Ferguson today is the sub contract steel work fabrication from BAE Systems for the Type 26 frigates, and even the promised capital investment to improve Ferguson’s antiquated shipyard has not been invested yet, despite it taking years to install critical equipment, like a panel line.”

That subcontract work illustrates how modern shipbuilding operates. No single yard constructs an entire complex vessel alone. Ferguson is not large enough to build a Type 26 frigate end to end, but it plays a vital role fabricating major sections that are transported to BAE’s Govan and Scotstoun yards for final integration. This distributed model is the global norm. Suggesting Ferguson is incapable of building ferries because it is smaller than some foreign yards ignores how the industry actually works.

Sweeney also drew on the recent experience of the Northern Lighthouse Board’s vessel replacement programme. He noted: “In the case of the Northern Lighthouse Board’s vessel replacement project, which was won by Gondan shipbuilders in Spain, BAE and Ferguson Marine were invited to tender for the contract, but withdrew shortly after being informed that they were among the six suppliers to be selected. BAE said that a UK based social value consideration is not being considered as essential. In response to the tender, Ferguson said the Northern Lighthouse Board’s stated position on economic and social impact scoring would make no distinction between impacts in the UK and other countries. We are treating apprentices in other foreign countries the same as we are at home. It is crazy.”

He urged ministers to fix this systemic flaw: “I ask the Scottish Government to accept the generous offer from the UK Government for a legislative consent memorandum to update Scottish public procurement law and introduce a mandatory local industrial social value weighting in all public procurement competitions.”

For now, the Scottish Government has shortlisted two Turkish and two Chinese shipbuilders for the Northern Isles ferries. To Sweeney, this is nothing less than “scandalous” when yards in Scotland could compete if the rules gave weight to the wider economic and social benefits.

The online commentary has cast Ferguson as either too small or too unreliable, but the record shows something different. Ferguson did not fail to win the contract because it could not deliver. It did not bid because the procurement system made doing so futile. Until the Scottish Government addresses that, the apprentices and jobs that could be sustained at Port Glasgow will instead be exported overseas.