Ferries are essential for sustaining Scotland’s most remote communities. In 2014, Transport Scotland identified the need for two new ferries to improve the reliability and capacity of services on the Clyde and Hebrides network. In October 2015, Caledonian Assets Maritime Limited (CMAL) awarded contracts to Ferguson Marine Engineering Limited (FMEL) to design and build the new vessels at a combined fixed price of £97 million. The first vessel (Hull 801) was expected to be completed in May 2018 and the second vessel (Hull 802) in July 2018.
The project experienced significant delays and problems, which culminated in FMEL entering administration in August 2019. The Scottish Government subsequently established a new public sector body - Ferguson Marine (Port Glasgow) Limited – to complete the vessels, which are now expected to cost more than double the original budget and, at best, will be delivered over four years late.
This audit will review the initial arrangements that were in place to manage the project and how well the Scottish Government, Transport Scotland and CMAL responded when problems arose. It will consider the learning that has been applied to the new arrangements and make recommendations to help improve the management of similar projects.