Scotland’s Ferry Fiasco Continued

More evidence of secret dealings and irregular conduct has emerged in Scotland’s celebrated ‘ferry fiasco’, to add to the details I described last month in the LRB. A BBC Scotland documentary, ‘The Great Ferries Scandal’, broadcast on 27 September, revealed a remarkable level of co-operation between the Scottish government and the shipbuilder, Ferguson’s, to make sure that the Port Glasgow company won the contract against competition from shipyards in Germany, Poland and England. On the evidence of hundreds of documents leaked to the BBC, the principles of transparency and fair-dealing embodied in the procurement law of Scotland and England – and of the European Union, to which in 2015 the United Kingdom still belonged – look almost certain to have been broken.

A full list of the programme’s disclosures can be found on the BBC’s website. The most startling of them concern the ways in which Caledonian Maritime Assets Ltd (CMAL), the Scottish government company that procures and owns Scotland’s ferries, rigged the bidding process to ensure, first, that Ferguson’s appeared among the shortlist of bidders invited to tender for the contract; and, second, that Ferguson’s won the contract. The co-operation between the two companies started much earlier than previous media reports and official government inquiries suspected. Emails show that by December 2014, CMAL knew from Ferguson’s that as a newly re-formed company it would struggle to find a bank that would underwrite a builder’s refund guarantee, an essential requirement for inclusion on the shortlist. Nonetheless, CMAL approved Ferguson’s inclusion on the strength of the shipyard’s aspiration that the problem would ‘hopefully be sorted’.

Later, when the bids from the shortlisted shipyards came to be considered, CMAL’s assessors clearly knew which bid came from which shipyard, despite a pretence of blind-scoring with a series of designs labelled only A to F. In June 2015, CMAL invited Ferguson’s managing director and chief naval architect to a ‘strictly confidential’ face-to-face meeting to discuss ‘clarifications and perceived inconsistencies’ in Ferguson’s design. No other bidder was offered this privilege. Nor did any of them have access to a lengthy document which gave Ferguson’s an even more remarkable advantage in the design process. CMAL had provided the shortlisted bidders with a list of technical specifications that ran to 125 pages. The origins of this document, however, lay in a much more detailed one, nearly four times as long, that the ferry operator, CalMac, had delivered to the ferry owner, CMAL, in June 2014. How, and with whose permission, Ferguson’s had laid their hands on this is unclear, but its contents made up the bulk of the 351-page technical document that accompanied Ferguson’s bid, in a cut-and-paste operation that reproduced the font, the page numbers and the typographical mistakes of the CalMac original. CMAL’s assessors included senior CalMac staff, but nobody seems to have noticed they were being fed back their own demands, in their own language and with their own errors.

Even so, CMAL had to intervene further to make sure Ferguson’s could be justified as the winning bidder. The scoring system allocated points on two scales, quality and price, and original designs submitted by Ferguson’s measured poorly on the second – they were the most expensive – with no compensating high score on the first. Conversations between CMAL and Ferguson’s produced a series of adjustments that gave the shipyard 36.5 points out of 50 for cost and 38 out of 50 for quality. It was still the most expensive, but a ten-point advantage for quality made it the overall winner – the ‘preferred bidder’.

Relations between CMAL and the shipyard soured soon afterwards over Jim McColl’s unwillingness or inability to produce a refund guarantee. But until that point CMAL seems to have been happy enough to oblige the Scottish government’s determination to have the ferries built in Scotland, even if it meant the bending or breaking of the procurement rules and, in the case of the refund guarantee, ignoring the standard practice of shipbuilding.

Does it matter? ‘It happens all the time,’ people say, implying that manufacturing industry and governments everywhere will sometimes transgress the rules of procurement, either out of personal corruption or to defend their version of the national interest. In Scotland, there is also the temptation to argue that the Scottish government’s behaviour in Port Glasgow barely registers on a scale of political mistakes and misdemeanours that also includes the Westminster government’s present ruination of the British economy.

Still, it would be good to know exactly who CMAL was obeying when its executives bent the rules as they did – which politicians they were obliging. Under questioning so far, none has looked as though butter would melt in their mouths. Meanwhile the ferries to the Western Isles, lacking renewal, break down week after week.