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by Louise Wilson
18 October 2023
No evidence of fraud in ferry contract award

No evidence of fraud in ferry contract award

The ferry procurement body has been cleared of fraud following an investigation into the process which resulted in Ferguson Marine winning the contract to build two new ferries for the Clyde and Hebrides route.

While no evidence of fraud was found, the report did point to a series of “missteps” in the tender process.

Allegations surfaced in a BBC Scotland documentary last year that Ferguson Marine was given preferential treatment – a breach of procurement rules.

The documentary did not allege criminal fraud, but did suggest the process had been "rigged" in favour of the shipyard.

CMAL, as a public body, is legally required to investigate any fraud allegations. Barry Smith KC was appointed to do so earlier this year.

His report was handed to CMAL last month and has now been made publicly available by the body.

Smith concluded: “Ultimately, the question posed was whether a fraud was committed during the procurement process. I did not find evidence of fraud. That is not the same as saying that the procurement process was conducted perfectly.

“The central allegation made by the BBC (albeit in correspondence with CMAL, though not made so expressly in the documentary) was that ‘CMAL colluded with FMEL during the tender in a way which led to the process being corruptly rigged in favour of FMEL’ […] I found no evidence that any CMAL employee had acted with dishonest or fraudulent intention.”

But the BBC has said the review "explicitly excluded the central allegations made in our film". The broadcaster declined to take part in the investigation for this reason.

A spokesperson said: "Those allegations questioned whether the ferries contract was awarded fairly and within procurement rules. We note that Mr Smith, in his conclusions, mis-states the BBC's published position, and clears CMAL of criminal fraud, an allegation we did not publish."

The Ferguson Marine shipyard, then owned by prominent SNP supporter Jim McColl, was awarded the contract in 2015.

Smith was asked to investigate claims that the shipyard was allowed to proceed with a bid for the contract despite not meeting pre-qualification requirements, had been given confidential and restricted information, and was allowed to revise its bid after the closing date.

Chief executive of CMAL Kevin Hobbes said: “We welcome the findings of Barry Smith KC‘s independent investigation, which has established no evidence of fraud in the procurement of vessels 801 and 802.

“We do, however, recognise that the report identifies a number of missteps over the course of the procurement during 2014 and 2015, and mitigations have been in place for several years to ensure these do not happen again.

“For example, all parties involved in a CMAL competitive tender are required to sign a confidentiality agreement, and all clarification meetings with bidders are now carried out using the same method of communication.”

The two new ferries were set to enter service in 2018 and 2019, at a cost of £97m. Neither vessel has yet been completed and the price tag has almost tripled.

The latest estimate said MV Glen Sannox will enter service in March next year, while MV Glen Rosa is expected in May 2025.

Problems at the shipyard, with the design of the vessels, and the failure to get a refund guarantee have been blamed for the spiralling cost and severe delay.

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