Scottish Labour MSP Paul Sweeney has questioned whether the Scottish Government will instruct Caledonian Maritime Assets Limited (CMAL) to disregard any bids from Chinese shipyards for the construction of two new freight ferries for the Northern Isles.
In a written question lodged on 17 October (S6W-41401), Sweeney asked whether ministers would act “in light of reported concerns regarding unfair, market-distorting state support for Chinese shipbuilding firms, and the lack of a trade agreement between the UK and China as defined by section 89 of the Procurement Act 2023.”
The question follows confirmation from Transport Scotland that four shipyards have been shortlisted for the £200 million project: Cemre and Tersan in Turkey, Guangzhou Shipyard International in China, and a UK–China partnership involving Stena and China Merchants Jinling Shipyard in Weihai.
The two new ships are intended to replace older freight vessels on the Aberdeen–Kirkwall–Lerwick route. They will be built mainly for carrying cargo but will also have space for around 200 passengers at busy times.
The decision to shortlist Chinese shipyards has prompted concern over the level of state support available to China’s shipbuilding industry. Under Section 89 of the UK Procurement Act, public bodies can bar bids from countries without a free trade agreement with the UK, though applying this rule is up to devolved administrations and the contracting authorities involved.
The tender process, managed by CMAL on behalf of Transport Scotland, is part of a broader effort to modernise Scotland’s island ferry fleet after years of delays and cost overruns at domestic yards.
The Scottish Government’s formal response is due by mid-November.
We export our public funds to foreign countries. Value for money being the excuse, yet ignoring the unquantified value of the money circulating in our economy. It all eventually ends up in the hands of the oligarchs, but on the way it does some good. That money going overseas boosts their economies while draining ours. Of course big business likes the tax savings, but then complain about the cost of welfare and benefits. Not realising or more likely ignoring that the benefit system allows if not encourages businesses to pay lower wages. If public money was spent in the UK it would be better for us all, even if businesses did buy in components and raw materials from outside. This should work across the board and not just for large ticket items such as warships and armoured vehicles. The global economy is at times far too global.
I would say that allowing China is a security concern.
We absolutely should not be funding the naval industry of a military rival such as China. It doesn’t look like British or European yards will be commercially viable for many of these contracts, but maybe friendly Japenese or South Korean yards would be?
Ultimately, once you factor in knock-on and supply chain work, and the income / coprorate / value-added tax generated, the price difference between a foreign yard and British yard is probably not that much. Our problem is that governments didn’t factor this in to previous industrial policy, and as a result British based firms don’t have the industrial capacity to even bid for many of these contracts.