MV Glen Sannox (2017)

For the 1957 built car ferry, see MV Glen Sannox (1957).

Passing Greenock when starting sea trials, 13 February 2024
History
NameGlen Sannox[1]
NamesakeMV Glen Sannox (1957) and Glen Sannox on the Isle of Arran
OperatorCaledonian MacBrayne
Port of registryGlasgow
RouteArdrossan/Troon–Brodick
Ordered16 October 2015
BuilderFerguson Marine, Port Glasgow, Inverclyde, Scotland
Cost£97 million original contract for two ferries; £380 million as of June 2024, and £45 million loan written off.[2]
Yard number801
Laid down17 February 2017
Launched21 November 2017
Christenedby Nicola Sturgeon First Minister of Scotland
IdentificationIMO number: 9794513
StatusSea trials
General characteristics
Tonnage1,273 DWT[3]
Length102.4 m (335 ft 11 in)[3]
Beam17 m (55 ft 9 in)[3]
Draught3.4 m (11 ft 2 in)[3]
Installed power2 × Wärtsilä 34DF diesels[4]
Propulsion
Speed14.5 kn (26.85 km/h)[3]
Capacity
  • 1,000 passengers, 127 cars or 16 HGVs (planned)[5]
  • 852 passengers (actual)[6]
At the shipyard's Newark Quay immediately after launch in November 2017 – lacking decks 6 and 7 (observation lounge, crew accommodation), windows painted on, dummy funnels, and defective bulbous bow. At launch, the second ship Glen Rosa was about 50% heavier.[7]
In April 2024, at Inchgreen Quay in Greenock, continuing work on LNG system.

MV Glen Sannox is a car and passenger ferry constructed at Ferguson Marine in Port Glasgow for the Scottish Government asset company CMAL to lease to its ferry operator Caledonian MacBrayne, planned to serve the Ardrossan to Brodick crossing to the Isle of Arran. It is to be the first of two dual-fuel CalMac ferries, capable of operating on either marine gas oil, or LNG which offers a marked reduction in sulphur, nitrous oxide and carbon emissions. The ship's name, chosen from a shortlist by public ballot on 1 June 2017, recalls an earlier Arran ferry.[1]

Six shipyards bid for fixed price contracts to design and build the two ships. Ferguson Marine (FMEL), the only Scottish bidder, offered to do this for £97M total; on 31 August 2015 the government announced them as preferred tenderer, before negotiations were completed.[1][5] FMEL was a new company formed in September 2014 when Jim McColl rescued the shipyard from bankruptcy, on 21 August 2015 it told CMAL that it could not provide the contractually required bank-backed guarantee. FMEL had already raised this directly with Scottish Government ministers, who now decided the government would take on the risks while protecting CMAL from liability, and the contracts were awarded on 16 October 2014.[8][9]

FMEL scheduled a May 2018 delivery date, but delayed providing CMAL with detailed drawings and plans before starting construction, causing delays when work had to be redone. In July 2017, FMEL said they were not responsible, claiming £17.5 million for additional costs, but CMAL dismissed the claim as not valid. The ship was substantially incomplete when launched on 21 November 2017, and the dispute escalated with further delays and claims. In August 2019, FMEL went into administration, having been paid £83.25 million in contract payments, and £45 million in loan payments from the Scottish Government.[8][9]

The shipyard was nationalised on 2 December 2019 as a new company named Ferguson Marine (Port Glasgow) Ltd.,[10] increasing costs and further lengthy delays became a continuing political scandal,[11][12][13] the "ferry fiasco".[14]

The ship's sea trials began in February 2024,[15][16] and it was moved to Inchgreen Quay in Greenock, freeing the Newark Quay at the shipyard for the launch of Glen Rosa.[7] Further delays were largely attributed to difficulties in completing the LNG power system,[17][2] and handover was expected to take place before the end of September 2024.[18] A further delay in commissioning the LNG system was announced in September 2024, pushing the expected delivery date back by at least 2 weeks.[19] Cooling the LNG tank took several days, with bunkering completed by 18 September[20] before sea trials using LNG began on 20 September. The "owner's acceptance trials" with CMAL were to start on 30 September, and then CalMac crew familiarisation trials before it enters service.[21]

The planned handover on 30 September was postponed due to what was described in the media as a 'last minute hitch'.[22] Manufacturer's sea trials were successfully completed on 23 October. On 25 October, Fergusons said a revised date for handover to CMAL was to be confirmed 'shortly'.[23]

History

[edit]
Further information: Ferry fiasco

The state-owned enterprise CalMac, originally Caledonian MacBrayne Ltd, was formed in 1973 as a vessel owner and operator providing most of the ferry services to the Firth of Clyde and the Hebridean islands off the west coast of Scotland. In 2006, its roles were split to satisfy EU competition rules. As Caledonian Maritime Assets (CMAL) it continued to own the Caledonian MacBrayne fleet and order new ships, while CalMac Ferries Ltd (CalMac) was created as a separate company which successfully bid in open competitive tender for the contract to operate the services. Many of CalMac's ferries had been built by Ferguson Shipbuilders, which five years earlier had employed 300 people, but it had struggled to compete and CalMac orders were won by the Remontowa shipyard in Gdańsk, Poland.[24][25]

Ferguson Shipbuilders in 2011, adjacent to Newark Castle, seen across parkland on the former Lamont's shipyard site

In 2011 Fergusons successfully bid for two small ships for CMAL, funded by the Scottish Government's Low Emissions Hybrid Ferries project.[26][24]

Ferries plan

[edit]

The Scottish Government's Ferries Plan, which its executive agency Transport Scotland published in December 2012,[27] included indicative proposals for two new major vessels.[28] International emissions regulations tightened, and cleaner liquefied natural gas (LNG) fuel was adopted by ferry operators in Northern Europe,[29] particularly Norway. The Danish island of Samsø invited tenders for the first in the EU, and in June 2013 Remontowa was awarded the contract for this dual-fuel ferry, to be delivered in October 2014.[3][30] David MacBrayne Ltd bid to operate a ferry connecting Gotland in Sweden, with detailed proposals drawn up by CalMac, but in May 2014 this bid was reported unsuccessful.[31]

To prepare the Vessel Replacement and Deployment Plan (VRDP), Transport Scotland held tripartite monthly meetings with CMAL and CalMac, starting in October 2013. By agreement, CalMac led development of programmes for the major vessels.[32] In early July 2014 the Scottish Government, using CalMac's initial analytical work, authorised the procurement of two new major ferries, aiming to name the preferred bidder in nine months. CMAL's head of vessels said then that this timetable was a "hugely challenging". It left CalMac only three weeks to produce its Specification of Technical and Operational Requirements. They quickly adapted work done for the Gotland ferry bid, but made some errors such as including irrelevant description of passenger cabins. The exceptionally large and detailed specification now had to be made more concise as part of CMAL's tender documents.[24][28]

Ferguson Shipbuilders had been struggling to get orders. Cash flow problems, and difficulties in arranging financial bonds (or refund guarantees) left it unable to bid for several major contracts. The workforce was reduced to 77, then on 15 August 2014, a month before the Scottish independence referendum, the yard went bankrupt,[33][34] and the administrators KPMG immediately laid off 70 workers.[35] The First Minister of Scotland, Alex Salmond of the SNP, personally intervened and persuaded businessman Jim McColl, one of his Council of Economic Advisers, to buy out the shipyard.[8] McColl's Clyde Blowers Capital, previously deterred by the yard's debts, now took over its assets and business,[24][36] and formed Ferguson Marine Engineering Ltd. (FMEL) as a new subsidiary. On 30 September Deputy First Minister Nicola Sturgeon announced that FMEL had been given the order for a third hybrid ferry.[34] Government ministers had given CMAL a letter of comfort allowing this contract to go ahead without a refund guarantee.[37]

CMAL's draft specification was disputed by CalMac, who said on 14 October that it only met 20% of their requirements. The compromise eventually specified in the tender documents meant wider ships which would need improvements to ports.[24]

Vessel procurement process

[edit]

The start of the vessel procurement process was publicly announced on 15 October 2014 by the Transport Minister Keith Brown.[32] The pre-qualifying questionnaire (PQQ), issued by CMAL on 17 October,[38] invited shipbuilders to demonstrate their capability for detailed design, construction, testing, and delivery of two 100 metres long ROPAX ferries.[39][40] The questionnaire emphasised the requirement for Bank Refund Guarantee bonds before work started, and requested evidence from a bank confirming its willingness to provide these guarantees.[41][42] Following discussion with CMAL, FMEL said on 9 December that guarantees from its parent company Clyde Blowers Capital (CBC) would be inappropriate, so it intended to provide Bank Guarantees and would "endeavour to provide Guarantees to levels that provide the security you require."[41]

Of the six shipbuilders shortlisted for the invitation to tender (ITT), only Remontowa had built a dual-fuel LNG engined ferry.[43][44] The ITT included a 135-page "Specification of Operational and Technical Requirements" (SoR) for the vessels, which were to be dual-fuel LNG engined. Under the industry standard BIMCO design and build New Build Contract, shipyards bid a fixed price to take responsibility for designing and building ships to meet the specification, and the full risk for this remains with the builder throughout the construction period. Bidders were required to accept the terms of the draft contract included with the ITT, or provide comments and/or propose amendments to this draft.[9]

The ITT, issued on 10 December 2014, required refund guarantees on behalf of the Builder by "a first class international bank". FMEL wrote that they had no comment to make "at this time". When FMEL told local MSP Stuart McMillan that they could not provide these guarantees, he wrote to the deputy first minister John Swinney. In early February 2015 transport minister Derek Mackay responded; "While CMAL's board in line with standard industry practice has a preference for refund guarantees it has on occasion taken alternative approaches to ensure that ship yards, including Ferguson under its previous owners, were not excluded from bidding for those government contracts." This letter was taken by McColl as suggesting that "alternative approaches were acceptable. On this basis FMEL proceeded with the tender." CMAL say they had "no awareness of, or involvement in, these exchanges."[38][45] Tenders were submitted by 31 March 2015, then evaluated on cost and quality by CMAL with assistance of a consultant naval architect. CalMac gave technical input. The FMEL design was heavy, with large engines, and the two ship contracts totalled £109.8M. Their bid mentioned a lighter version, on 17 May the consultant asked for details, enabling FMEL to price each ship contract at £50.25M, eventually negotiated down to £48.5M each, a total of £97M.[24][9][46]

Shipyard entrance in August 2015, "Ferguson Shipbuilder" sign being removed before demolition of adjacent brick office building and East Range workshop bay.

The assessment placed the Remontowa bid second,[46] FMEL's was "the highest quality bid received but also the highest price. Taken together, the FMEL tender achieved the highest overall evaluation score". On 20 August the Transport Scotland Ferries Unit wrote asking the transport minister to approve in principle award of the contracts by CMAL before the tenders expired on 31 August.[28][38]

Transport Scotland (TS) told CMAL on 21 August that FMEL would be named as preferred bidder at the end of the month. Also on 21 August, FMEL's lawyers said that refund guarantees could not be arranged by CBC, and instead proposed guarantees from its subsidiary, the holding company Ferguson Marine Engineering (Holdings) Limited, but CMAL required independent refund guarantees as specified. Negotiations were far from concluded, and CMAL told TS that announcing the preferred bidder would "materially reduce their negotiating hand"; TS offered CMAL a letter of comfort if needed.[38][47]

First Minister Nicola Sturgeon met Jim McColl at the shipyard on 31 August, and announced that FMEL was the preferred bidder.

On 31 August, First Minister Nicola Sturgeon visited the shipyard and named FMEL as preferred tenderer for the £97m contract, MacKay said it was for dual-fuel ferries, "allowing them to use cleaner fuel and future-proofing them for the advent of tighter regulations around sulphur emissions." Erik Østergaard, Chair of CMAL, said "Subject to agreement on all points, we hope to be in a position to finalise the award of the contract later in September."[38][47]

CMAL understood that government ministers wanted the ferries built in Scotland by FMEL, but on 25 September the CMAL board considered there were "too many risks involved around the refund guarantee matter which are still to be resolved and to that end the Board are not in a position to award the contract to FMEL at this stage." Next day, Østergaard emailed TS that CMAL could not recommend the level of unsecured risk, and proposed rejecting the deal; putting the project on hold, or "re-opening the contract negotiations with Remontowa (with whom we have a track record of doing business) or even a second yard in parallel while continuing negotiations with FMEL." Initially FMEL proposed an unusually small final milestone instalment, reducing their incentive to complete, but on 29 September they increased it to 25%, which with insurance backed guarantee coverage at 25% left CMAL at risk for around half of payments made pre-delivery. CMAL produced a paper setting out the risks. On 9 October TS confirmed that Scottish ministers had noted and accepted the risks and, as CMAL's sole shareholder, approved award of the contracts. Ministers approved £10.6m loan funding to CMAL, with special provisions to protect against the risks and repayments only due after completed ferries were in service. MacKay and Swinney signed off on the contract, and on 16 October contracts were signed between CMAL and FMEL,[38][45] which MacKay publicly announced that day at the SNP's annual conference in Aberdeen.[48]

In its 2022 report, Audit Scotland said the Builder’s Refund Guarantee (BRG) is "an integral part of shipbuilding contract and is the main source of financial security for a ship buyer", giving the shipbuilder "a significant incentive to build a quality product as the buyer can cancel the contract and claim a full refund of all payments if the ship does not meet its required specification." The contract "places full responsibility and risk for the design and build of the vessels with the shipbuilder and does not allow the buyer to intervene in the running of the project." The lack of a full refund guarantee transferred some of the risk from FMEL to CMAL, so "the contract was not effective when problems emerged."[9]

Construction – Ferguson Marine Engineering Ltd.

[edit]

The build strategy of Ferguson Marine Engineering Ltd. (FMEL) was to construct vessels 801 (Glen Sannox) and 802 (Glen Rosa) concurrently until they were ready for launch, then complete work on 801 (for May 2018 delivery) before focussing on 802 (for July 2018 delivery). Their dates programme and schedule for payments, initially drafted on 21 August 2015, included 15 milestone events and payments for each vessel to aid their cash flow, rather than the usual five or six. CMAL agreed to this.[9]

Catriona still on the slipway, workshop bay being removed before demolition of the old brick office building.[9]

The contract, signed on 16 October, required the shipbuilder to provide CMAL with detailed drawings and plans 30 days before construction started, and FMEL’s project plan allowed three months to design the relevant hull section, but the agreed milestone schedule had 15 December 2015 as the start of cutting steel. Around then, CMAL informed TS of delays by FMEL in organising work.[38][9][49] Catriona occupied the slipway until its launch on 11 December. A workshop bay was demolished, and the old brick office building was demolished before work on the new large prefabrication shed from May to August 2016. New offices were then built nearer the main road. CMAL reported that this redevelopment reduced the available space and hampered concurrent work on both vessels, but FMEL later attributed the delays to CMAL.[9]

To mark the start of construction, the first steel for both vessels was cut on 16 February 2016 at a ceremony attended by transport minister Derek Mackay.[50][51]

In the constricted workspace, FMEL tried to build Glen Sannox at the same time as Hull 802 (in two sections).

Problems increased as FMEL did construction work "at risk", without approval of drawings by CMAL, and without regulation approvals required by the classification society (Lloyd's Register) and the Flag Authority (MCA). Delays built up as incorrect work had to be re-done. TS informed Scottish ministers that the vessels were likely to be late, CMAL said it had cash flow problems due to contract problems and was assisted by accelerated payments and a loan.[38][9] The vessel's bulbous bow was rough rather than smooth, and condemned by Lloyd's as not fit for purpose, but left uncorrected at the time of the launch.[52]

At launch, the ship had dummy funnels, decks 6 (passenger lounges and crew accommodation) and 7 (master's office, officers cabins) were not yet built, windows were painted on, and the rejected bulbous bow had yet to be replaced. The new offices and prefabrication shed are seen to the left of the entrance.

Glen Sannox was launched on 21 November 2017 by the then First Minister Nicola Sturgeon,[53] but was substantially incomplete at the time.[7] The bridge (and other) windows were painted on, and the funnels were not operational, but only for show for the launch.[54][52]

In July, FMEL had claimed £17.5 million for additional costs, CMAL argued that the claim was not valid, but the amount claimed was increased.[9] In August 2018, new Cabinet Secretary for Transport Michael Matheson said it had been confirmed that the ship was to be delivered in June 2019, followed by two months of crew familiarisation and sea trials.[55] CMAL took legal advice, and completely rejected the claim in March 2019, but FMEL did not contest this in court. The Scottish Government commissioned an independent view in May 2019, and concluded in June 2019 that there was no legal basis for CMAL to pay more than the £97 million fixed price for the contract. In August 2019, FMEL went into administration. By then, FMEL had been paid £83.25 million in contract payments, and £45 million in loan payments from the Scottish Government.[9]

Construction – Ferguson Marine (Port Glasgow) Ltd.

[edit]

On 16 August 2019 Derek Mackay, now the finance and economy secretary, announced a nationalisation plan to take the shipyard into public ownership.[56][57] A commercial transaction nationalising the shipyard was completed on 2 December 2019, making it a new business named Ferguson Marine (Port Glasgow) Ltd., with marine engineer Tim Hair appointed as turnaround director.[58]

A report issued on 9 December 2019 estimated that, with good progress, Glen Sannox would be handed over to Caledonian Maritime Assets Ltd (CMAL) in the last quarter of 2021, and that completing the two ferries was likely to increase the total cost to over £207 million.[59] In April 2020, Ferguson Marine (FMPG) contracted with International Contract Engineering, a marine design consultant, to revise the design and outfitting of Glen Sannox in advance of her eventual delivery.[60] During the COVID-19 lockdown in 2020, the shipyard was closed or subject to restricted working for almost six months.[61]

MV Glen Sannox moored at Ferguson Marine post drydocking in 2020. Deck 7 has been added aft of the bridge, whilst deck 6 (beneath it, painted grey) still lacks the fore observation lounge windows.

On 10 August 2020, tugs moved Glen Sannox to the Garvel dry dock in Greenock for remedial work including replacement of the bulbous bow, paintwork repair and removal of marine growth.[62] After additional work, the ship returned to the Fergusons shipyard in Port Glasgow on 9 September 2020.[63]

In October 2022, FMPG announced that Glen Sannox would initially operate only on marine gas oil, as vacuum sensors required for the LNG system were not available.[64]

Further delays to both ferries and increasing costs of £250 million, subsequently rising to £340 million by September 2022, have resulted in controversy surrounding the contract and the lack of transparency in the decision-making process.[65][66] The Scottish Government announced that key documents relating to the decision-making process had gone missing.[67] In September 2023, a failed safety audit meant that MV Glen Sannox was further delayed: among other issues, the Maritime and Coastguard Agency (MCA) insisted on the installation of additional staircases as a condition of approving a safety audit. The work meant that planned sea trials of the Glen Sannox were delayed until the first quarter of 2024, raising doubts over whether the ship will be available for the start of the 2024 summer season.[68] Meeting MCA safety regulations ultimately meant that the passenger capacity of both ferries had to be cut from a planned 1,000 to 852.[6] The ship began manufacturer's sea trials on 13 February 2024.[16]

Deputy First Minister of Scotland, Kate Forbes, visiting the ship.

In June 2024 a delivery date of 19 August 2024 was announced,[2] however this was later put back, with handover then expected to take place before the end of September 2024.[18] On 18 July the Deputy First Minister of Scotland, Kate Forbes, visited the shipyard to announce plans for Ferguson Marine, and was shown round Glen Sannox at Inchgreen Quay.[69] The end of September date was in turn pushed back; as of 25 October, no revised date for handover has been announced.[23]

LNG and port infrastructure

[edit]

Marine diesel oil is relatively cheap but very polluting, marine gas oil is cleaner but more expensive. Liquefied natural gas (LNG) is the cleanest burning fossil fuel, with around 20% lower CO2 emissions than marine gas oil.[29][70] LNG is currently shipped to the Grain LNG Terminal in Kent, then taken by road tankers to five off-grid networks in Scotland, including Stornoway, Oban and Campbeltown. In this way, LNG (from Qatar) is to be brought to Troon and Ardrossan for the ferries.[71] On 24 May 2023, CalMac awarded Molgas Energy UK Ltd the contract to supply and deliver the LNG to the new ferries.[72]

Service

[edit]

Glen Sannox is being built for the Ardrossan to Brodick crossing. She was originally intended to serve as a running mate to MV Caledonian Isles on the Ardrossan–Brodick and the Ardrossan–Campbeltown crossings.[11][12] In May 2023, it was announced that Glen Sannox's sister vessel, MV Glen Rosa, would also serve the Arran route.[73] However, the two new Arran ferries will initially be operating between Troon and Brodick for the first two or three years of their career, due to the planned upgrade works for Ardrossan harbour.[74]

References

[edit]
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  68. ^ "Concern over whether Scots ferry fiasco vessel will set sail after safety audit fail". The Herald. 12 September 2023.
  69. ^ Sullivan, Joe (18 July 2024). "Kate Forbes 'optimistic' about Ferguson Marine's future amid £14.2m cash injection". The National. Retrieved 16 August 2024.,
    Ship's bridge, outlook over Inchgreen Quay to Ladyburn Business Centre, Greenock.
  70. ^ "Liquefied natural gas (LNG) for vessels 801 and 802: FOI release". gov.scot. 11 January 2022. Retrieved 4 July 2024.
  71. ^ "Customer FAQs". CalMac Ferries. Retrieved 4 July 2024.
  72. ^ "CalMac award of LNG supply tender". CalMac Ferries. Retrieved 4 July 2024.
  73. ^ "Competition Launched to Name Dual Fuel Ferry". Caledonian Maritime Assets Ltd (CMAL). 2 August 2023. Retrieved 2 August 2023.
  74. ^ "Ardrossan Harbour redevelopment". North Ayrshire Council. Retrieved 1 September 2023.
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