Chamber and committees

Yes—I see no reason why not.

I am not going back on the commitment that I gave earlier but, since you are asking me about that, I want to say something for the record—although everything that I say here is on the record; that is understood. As you know, there is a requirement for the Government to assess anything that it puts in the public domain to make sure that legally privileged or commercially confidential information is being treated appropriately. With that caveat about the process that we need to go through, I see no reason why not.

I have been paraphrasing—although paraphrasing pretty closely—what was in the briefing in terms of the advice that was given to me about the on-going negotiations, and I certainly see no reason why I cannot provide that to the committee.

That is what I am saying: I was not involved personally in that decision.

From memory, I think that it was a special adviser who was with me. I asked for some work to be done out of that meeting.

That meeting was on 31 May 2017. By that point, there were already concerns about slippage in the contract. There were concerns about what I would describe as the cash flow and financial position of FMEL, so when Jim McColl asked to see me, it was reasonable that I spoke to him, given the importance of the contract, which we are reflecting on now.

You have seen all the material that will tell you what the issues were that were of concern to him and to us at the time, which were around the finances. There had already been discussion about the changing of the milestone payments. The reduction of the final 25 per cent payment to 10 per cent freed up £17 million to help with cash flow. Jim was and has been publicly—although not since then—of the view that he had money unfairly tied up in the surety bond.

Special advisers are civil servants—they are temporary civil servants—so that was not an issue in that respect. You say that the meeting was a “big deal”—

The Government’s position is that, ultimately, we want all the commercial assets that we have taken ownership of to be back in the private sector, but we will have to make decisions about the point at which that becomes viable. We have not reached the point of decision on Ferguson’s.

Let me break that question down into whether it is normal for decisions on preferred bidders on contracts to be publicly announced, why it was me and whether it is something that I would normally do.

On whether it is normal to announce a preferred bidder, it is certainly not abnormal. Often, at the point at which a preferred bidder is being announced, if you think about it, the successful bidder—the preferred bidder—is being notified and the unsuccessful bidders are being notified. At that point, there is always a possibility that things will leak into the public domain anyway; so, often, a decision is taken to announce a preferred bidder. I could find you examples of other Governments doing exactly the same thing, such as the United Kingdom Government on a train contract and the Welsh Government a couple of years ago on a major roads contract.

As it happens, a few months after this announcement—this addresses your question on whether it is something that I would normally do—I announced, in May 2016 if memory serves me correctly, that CalMac was the preferred bidder for the Clyde and Hebrides ferry services contract. It was nothing to do with Ferguson’s in the broader ferry space; it was about the contract for the operator of the ferry service. I announced the preferred bidder for that, which would suggest to you that it is not completely unknown for preferred bidders to be announced or, indeed, for me to do it.

Finally, on why I, as opposed to a minister, did it, in any Government decision that leads to an announcement, there will be consideration within Government involving special advisers and communications officials asking, “Should this be something that the First Minister does?” That is how the media diary of the First Minister is determined. I will often get suggestions that an announcement is coming up and it is proposed that I do it, and that is what would have happened here.

Yes, but in my mind—I am trying to think—I knew that there were issues that he was expressing concern about. By that point, ministers were aware that there were issues around slippage in the contract. CMAL was reporting regularly to what was called the project steering group.

It was a conversation that I clearly thought that it was appropriate to have. Did I go into that meeting thinking that it was a great crisis meeting? No, nor did I come out of it thinking that. Mr McColl had concerns about cash flow, and he had had concerns about the structure of the milestone payments. He had a concern, which he continued to express, about the amount of money that, in his view—it is not a view that I or CMAL would share—was unfairly caught up in what I think had, by that point, become the surety bond that replaced the builders refund and the partial builders refund guarantee.

Those were the kinds of concerns that he was expressing to me. Not long after that, of course, he made the first claim to CMAL for additional costs over and above the contract. Clearly, at that point, tensions were already appearing in the relationship between FMEL and CMAL, so that was the nature of that discussion.

In the terms that I have told you, there was a reference—a couple of lines in the briefing—as part of telling me the self-evident point that negotiations were not concluded. There was a reference to the fact that the negotiations, which were still under way, included complexities around the level of guarantee. To be clear, though, it did not say, “And this is a matter of really big concern.” It just said that that was one of the things that was still being negotiated.

Absolutely—I have referenced that several times. However, in this context, he is not a disinterested observer.

Mr Hoy, as has been reflected in the exchanges that we have just had, a key driver for the Scottish Government all along has been protecting employment at the shipyard. You have rightly probed me about the decision around nationalisation and, understandably in the circumstances, you have questions and scepticism about whether that was the right decision. However, I repeat that, without that decision, people would have lost their jobs. A key driver of the Scottish Government has been to protect employment, and I make no apology for that.

I was not party to your discussions at the yard earlier this week, but we have made no commitment to additional funding for the vessels since March 2022. The chief executive of what is now Ferguson Marine Port Glasgow wrote to the portfolio committee with an assessment of the cost to complete the vessels and the latest update on delivery timescales. That is still under scrutiny by the Scottish Government, with input from legal shipbuilding technical advisers, and we will come to a view on it in due course.

Beyond those vessels, of course we want to support the shipyard to reach a position in which it is a viable proposition that can successfully bid for and win contracts, and I think that the shipyard is closer to that now than it has been in recent history. That goes beyond the particular issues around the vessels that we are discussing.