Auditor General ponders new ferry inquiry after revelations

Scotland’s Auditor General is considering a new inquiry into two late and over-budget ferries after a documentary raised concerns about their procurement.

The Glen Sannox and as-yet-unnamed Hull 802 are due to be delivered in 2023 and early 2024 at a potential cost of more than £300 million – three times the initial £97 million contract.

Being built at the Ferguson Marine shipyard in Port Glasgow – which is owned by the Scottish Government – the vessels have encountered numerous issues, leading to questions about the process and the procurement.

A BBC documentary released last month said, among other issues, the yard was in possession of a more-than 400 page report from ferry procurement body Caledonian Maritime Assets Limited (CMAL) detailing technical requirements for the ships before they submitted a bid for the contract.

Large parts of the document, the BBC said, was copied verbatim into the shipyard’s bid.

The Auditor General said the documentary “raises new concerns and makes several claims related to whether CMAL followed due process”.

The Scottish Government said the revelations were concerning, with the Scottish Tories saying the police should be called in to investigate.

In a letter to the Public Audit Committee on Friday, Auditor General Stephen Boyle said he was considering expanding previous audit work done on the ships, given the documentary.

Previously, Audit Scotland raised questions as to why a builder’s refund guarantee – which would protect the buyer – was not part of the contract with Ferguson Marine despite usually being a mandatory consideration.

If the decision was taken to re-investigate, Mr Boyle said, he would focus on “the circumstances that allowed (Ferguson Marine) to progress beyond the pre-qualification stage of the procurement, despite being unable to meet the mandatory requirements”.

Mr Boyle said he would investigate “(Ferguson Marine’s) access to restricted technical information about the vessels, and its use of this when preparing its bid for the contract”.

He said he would also look into “CMAL’s compliance with procurement rules (that apply to the Restricted Procedure) during the tender clarification and negotiation process”.

In his letter to the committee – which is undertaking an inquiry into the ships – Mr Boyle added: “There remain several unanswered questions on the procurement, including the circumstances surrounding (Ferguson Marine’s) inability to provide a refund guarantee, and I note that the committee has recently issued four separate written requests for further information.

“I will take the responses to these requests into account when deciding the scope of any audit work.”

He also said he will consider the responses from public bodies to the accusations and has had “initial discussions” with both CMAL and Transport Scotland about their “duties to investigate”, adding: “Both bodies will keep us informed about their planned actions and I will take this into account when considering the scope and timing of any audit work.”

Public Audit Committee convener Richard Leonard said: “Getting a clear understanding of the Auditor General’s position on the allegations broadcast by the BBC is helpful.

“We have further evidence to gather, including from the First Minister, in the coming weeks and will continue to speak to the Auditor General about any future audit work he is considering on the ferries contract.”