Engineering firm BiFab plunges into administration

Burntisland Fabrications (BiFab) has entered administration after Scottish ministers ruled out nationalising the company.

Canada-based DF Barnes bought the engineering firm in 2018 but said it was “not an investable company at the time” and it was understood the Scottish Government would be the “primary financiers”.

That was after BiFab, which has yards in Burntisland and Methil in Fife as well as one on Lewis, had to be rescued by the Scottish Government in 2017.

The firm had been preparing to put up to 500 employees back to work on a wind turbine scheme when it emerged ministers could no longer provide the necessary financial support.

A £2bn deal subsequently collapsed to manufacture eight turbine jackets at its yard in Methil as part of the Neart Na Gaoithe (NnG) project.

In a statement, the firm said: “BiFab can confirm that the board has agreed to place the company in administration following the Scottish Government’s decision to remove contract assurances.

“The company has worked tirelessly to bring jobs into Fife and Lewis with some success.

“However, the absence of supply chain protections in Scotland and the wider UK have consistently undermined our ability to compete with government-owned and government-supported yards outside and inside the European Union.

“We would urge the Scottish and UK Governments to address these structural challenges as a matter of urgency in order to ensure that the benefits of offshore renewables are shared more widely with communities across the country.”

The Scottish Government argued state aid rules prevented it from bailing out the company.

Economy secretary Fiona Hyslop said: “I know this will be an extremely worrying time for BiFab’s workers and we will continue to do everything in our power to support them and stand ready to work with any company interesting in taking on the yards.

“The Scottish Government has been working for more than three years to support BiFab through the financial difficulties it has faced and remains committed to securing a future for the yards and the workforce.

“As a minority shareholder, we have been exhaustive in our consideration of the options available to us to support BiFab. There is no legal route for either the Scottish Government or the UK Government to provide further financial support to the company as things stand.

“In order to successfully secure and deliver new contracts, BiFab required working capital, the provision of appropriate assurance packages by the shareholders, and plans for investment at the sites.

“Despite commitments made at the time of acquisition, this is something the majority shareholder JV Driver was not willing to provide to secure future work.”

Unions said the lack of further financial support had left “industrial ruins” in Fife and Lewis.

In a joint statement, GMB Scotland and Unite Scotland said: “BiFab’s administration exposes the myth of Scotland’s renewables revolution as well as a decade of political hypocrisy and failure, in Scotland and the rest of the UK.

“The workers and communities dependent on these yards have fought so hard for a future and everyone was hoping that 2021 would finally be the turning point.

“Shamefully the Scottish Government has buried these hopes just in time for Christmas and they have worked together with UK Government in doing so.

“A decade on from the promise of a ‘Saudi Arabia of renewables’ and 28,000 full time jobs in offshore wind manufacturing, we’ve been left with industrial ruins in Fife and Lewis.”