Mackay tells MSPs he believed ferries contract risks had been resolved

The former transport minister said he is willing to answer questions at the Scottish Parliament.

Derek Mackay tells MSPs he believed ferries contract risks had been resolved Getty Images
A written submission has been made by the former transport minister to Holyrood's Public Audit Committee.

Derek Mackay has told MSPs that he believed the risks identified in awarding the ultimately disastrous ferries contract had been “resolved” at the time.

The contract to build two CalMac ferries was awarded to Ferguson Marine in 2015.

However, the vessels are now significantly behind schedule and over-budget.

Mackay served as transport minister between November 2014 and May 2016, during the period that the contract award was made.

In May, a missing document detailing decision-making in the process was located by government officials.

It showed that the decision was taken by Mackay, who has since been asked to appear before Holyrood’s Public Audit Committee to answer questions from MSPs on the issue.

In a written submission, the former minister said that he would be willing to attend the committee in person.

Mackay also provided answers in writing to questions put to him by the committee ahead of his planned appearance.

He was asked what assessment he made to satisfy that he was content to recommend the award of the contract to Ferguson Marine (FMEL), despite concerns having been raised by Caledonian Maritime Assets Limited (CMAL).

“The recommendation in the submission was ‘to proceed to contract award’,” Mackay told MSPs.

“The submission had followed the necessary process, procurement assessment and milestone stages, therefore I had confidence in the recommendation, but appreciated that risks had been identified and understood to be resolved.

“Ongoing CMAL concerns in the event of failure were about the risks ‘to the company’ ie CMAL, and therefore that Scottish Government should give further reassurance on risk transfer to CMAL, which is covered in detail in the submission.

“Risk analysis would be expected in such a submission, with mitigations also presented.”

Mackay continued: “There was a high level of confidence in the yard, which had successfully completed other vessels for the Calmac fleet.

“There was also an expectation that there would be sufficient monitoring and oversight.

“The committee will also note that CMAL would have robustly defended a legal challenge to an award.”

Mackay was asked to what extent he considers that Transport Scotland made a “clear and compelling” case in its correspondence in October 2015 to approve the decision to award the contract to FMEL.

He wrote: “As stated above I was satisfied that there was sufficient information to proceed with the recommendations, noting the purpose of this particular submission but mindful of previous submissions and briefings that would not have detailed the benefits of the proposed award.

“As has been publicly stated, the yard won on quality with an impressive bid.”

On the decision to bring the shipyard into public ownership, Mackay set out the goals of the Scottish Government at the time.

And he defended the decision to nationalise the yard, describing it as the “right thing to do” in the circumstances.

He said: “A critical point in timing had been reached. The objectives of Scottish ministers were to complete the two public sector vessels under construction at the shipyard in Port Glasgow, safeguard the jobs of the workforce, and secure a future for the business and commercial shipbuilding on the Clyde.

“There had been comprehensive and frequently updated options analysis and contingency work. It was believed the best way to deliver the objectives above was to proceed with the nationalisation route.

“Such a decision would have included a range of considerations, including cost and challenges involved, with as much diligence as could be conducted with FMEL at the time.

“With the yard in public ownership further analysis could be conducted and decisions taken, but the alternative of walking away would not have achieved the stated objectives of the government.

“The option of finding another commercial buyer was also not ruled out, but the public ownership option was the best outcome at the time and the right thing to do in the circumstances.”

Scottish Conservative shadow transport minister Graham Simpson MSP, said: “Derek Mackay’s submission still does not answer the fundamental question – why was the advice not to award the contract to FMEL ignored.

“There appear to be several inconsistencies between Derek Mackay’s account of the disastrous Ferguson Marine contract and the version of events given by current SNP Ministers.

“Throughout this whole scandal, Nicola Sturgeon and the SNP’s strategy has been to try and put all the blame on the disgraced former-MSP, yet in his own statement Derek Mackay tries to dodge responsibility and blame civil servants.

“The Scottish public are sick and tired of this never-ending game of pass the buck. Whether it’s Keith Brown, John Swinney, Nicola Sturgeon or Derek Mackay who is ultimately to blame, we need to get to the bottom of these dodgy dealings.

“Derek Mackay has said he will come before the Public Audit committee in person to answer questions. Members will put these points to him and hopefully we will finally get some answers.”

Commenting on Derek Mackay’s written evidence to the Public Audit Committee on the Ferguson’s Marine ferries Scottish Labour transport spokesperson Neil Bibby said: “This evidence doesn’t come close to answering the massive questions still hanging over this dodgy deal.

“There is no clarity whatsoever on why the SNP government were so determined to forge ahead with this contract against any and all warnings.

“The SNP have tried to block scrutiny at every turn and pin the blame on anyone but themselves – but the usual spin won’t cut it.

“Derek Mackay and every other minister embroiled in this mess must come before the Public Audit Committee and deliver some much-needed honesty.”