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Ferry procurement processes

Letter from Minister for Transport, 21 October 2021

Dear Convener

Further to the Cabinet Secretary for Net Zero, Energy and Transport's appearance at Committee on 14 September 2021 I have been asked to provide a written update on two issues discussed in the session, specifically, progress of the vessels currently under construction at Fergusons Marine (Port Glasgow) Limited and actions taken to improve ferry procurement processes.

I understand that the Committee has recently been provided with a quarterly progress report on the vessels currently under constructions at Fergusons and that any further updates on this should be requested through Cabinet Secretary for Finance and Economy. This update therefore focuses on the actions taken to improve ferry procurement.

We have announced investment of £580m in ports and vessels to support and improve Scotland's ferry services over the next five years, as part of our wider Infrastructure Investment Plan, unveiled in February. We are working constructively with partners and key stakeholders to progress a sustainable and efficient fleet replacement programme.

Following the most recent procurement exercise we made the announcement on the invitation to tender for two new Islay class vessels and look forward to seeing the benefits of these major additions to the fleet.

CMAL are working on further major vessel replacement projects for Mull and South Uist, and replacement freight ships for Orkney and Shetland. Work is also underway on the Small Vessel Replacement Programme. Phase 1 of this programme will result in up to 7 new vessels serving communities across the Clyde and Hebrides.

Building on lessons learnt, CMAL, as the procuring authority of new vessels for our ferry networks, has strengthened processes to include additional diligence and independent verification of the financial standing and ability to deliver of preferred bidders. Financial monitoring will continue to be undertaken prior to any contract award and continued at appropriate stages throughout the contract period. CMAL have also committed to obtaining further support from independent technical consultants, to work alongside their in-house experienced technical team when undertaking technical assessments during the procurement process.

As well as procuring new vessels, we have always said we would look to the second hand market for additional vessels to support our island communities, and the recent agreement to purchase of the MV Utne, is a direct result of this ongoing work. The MV Utne has been earmarked for the Oban-Craignure route, and communities in Skye and the Western Isles will also benefit as a result of the cascade of vessels elsewhere on the network. I trust that this update is in line with expectations and would be happy to provide further detail as required and to keep the Committee updated with further developments as we progress.

Graeme Dey