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SCOTTISH YARD BUILDING LNG HYBRID FERRIES ENTERS ADMINISTRATION

Monday, August 12, 2019 

Ferguson Marine Engineering, the company behind Ferguson Shipyard in Port Glasgow, UK, has begun the process of going into administration.

A statement from CEO Gerry Marshall said that the move was being taken with great regret and disappointment, but there was not considered to be any other option in the current circumstances. "However, the directors will continue to support the shareholder and the Scottish government to realise a positive outcome for the business and its employees."

The problems appear to have stemmed from the former Kvaerner-owned yard's failure to find agreement over a dispute concerning additional costs incurred under a contract from public sector agency CMAL to build two dual-fuelled hybrid ferries for Scottish operator CalMac. The original fixed price contract was worth some £97 million, but the true costs have been around double that. Ferguson's parent company, Clyde Blowers Capital (CBC), had asked the Scottish government to take a share of ownership. However, despite First Minister Nicola Sturgeon saying the government was determined to protect the workforce and see the two ferries completed, it rejected CBC's proposal. Apparently there is a clause in the loan agreements between the Scottish Government and Ferguson Marine Engineering that would allow the government to take over the yard for a nominal sum.

A statement from CBC said: ""As shareholder we have provided a number of viable proposals to avoid the process of administration and save the jobs of 350 employees, however CMAL and the Scottish government have consistently refused to participate in productive discussions, leaving the directors of Ferguson Marine Engineering Limited with no other options given the circumstances they are faced with."

Ferguson has previously delivered three hybrid ferries to CalMac, but the 102m-long pair under dispute are the first Scottish-built ferries to use dual-fuel technology. The first, named Glen Sannox, was launched in November 2017 and originally scheduled for 2018 delivery, but this was revised to Summer 2019 with the sister vessel handed over the following year.

The yard, originally part of Clark Kincaid, has previously been recused from administration when CBC bought it from administrator KPMG for £600,000 in 2014.

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