David Tydeman, CEO of Ferguson Marine (Port Glasgow) said the current board of directors and the Remuneration Committee have accepted the feedback from the Auditor General of Scotland with regard to performance incentives paid to senior managers for the financial year to end March 2022.
“We have taken on board the remarks from the Auditor General for Scotland. The Ferguson Marine board has already introduced greater transparency and governance in terms of future retention incentives. Scottish Ministers appointed a new chair, Andrew Miller, in January 2023 and we now have in place a framework that will improve the governance of future performance-related payments.”
He added: “We appreciate the points Mr Boyle is making regarding the completion of the ferries/funding gap, given that the shipyard is funded by public money. However, it is important to understand that the gap he identifies is largely to cover increased contingency expenditure – recommended by independent experts appointed by the Scottish Government, as well as funding for additional warranty spend that may arise in the 12 months after we hand over the vessels. I would stress that the construction costs to build both vessels are not a major contributing factor to this funding gap. FMPG is largely holding to the budget submitted in September 2022 to complete construction.
“Looking ahead, post-delivery of the two LNG hulls, we believe there is a strong future for the yard based on two visible pipelines: winning further shipbuilding contracts from CMAL as well as contracts for BAE to support its T26 frigate programme by building modules within the yard ready for assembly at its Govan shipyard. We already have some FMPG staff seconded to Govan and the arrangement is working well.
“We intend to submit a strong bid for CMAL’s small vessel replacement programme (SVRP) and believe we are well placed to win this contract, given our experience of exactly this type of work in the past. Securing this business, alongside completion of the two dual fuel vessels, is now our primary focus and central to the future of the yard.
“The SVRP ferries will be an evolution of three electric hybrids - MV Lochinvar, MV Hallaig and MV Catriona - successfully built by the shipyard in 2012-2015. Drawing on this previous experience and capability means we avoid a steep ‘first-of-class’ learning. Securing this programme of work would allow us to steadily increase efficiency, programme management, labour profiles and outputs, and place the yard in a competitive position for future larger and more complex ships, including those required by the offshore wind farm market over the next 15 years.”
Posted 14 Mar 2023