Publication - FOI/EIR release

Ferguson Marine Engineering Ltd & Caledonian Maritime Assets Ltd relationship: FOI release

Published: 21 Feb 2020

Information request and response under the Freedom of Information (Scotland) Act 2002

Published:
21 Feb 2020
Ferguson Marine Engineering Ltd & Caledonian Maritime Assets Ltd relationship: FOI release
FOI reference: FOI/20/00102
Date received: 23 Jan 2020
Date responded: 20 Feb 2020
Information requested

"the amount of money the Scottish Government (SG) has paid in respect of the contract for the two ferries 601 and 602 (including monies paid by CMAL and SG loans to FM) and also since nationalisation and including the costs of satisfying the various charges over assets of Ferguson Marine.”

Response

I would like to clarify that you refer to “two ferries 601 and 602” that are being built at Ferguson Marine (Port Glasgow) Ltd, these vessels are referenced as 801 (MV Glen Sannox) and Hull 802.
We have identified information within the scope of your request which is detailed in Annex A to this letter. While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because the undernoted exemptions of FOISA apply:-
Section 25(1) - information otherwise accessible
Section 30(b)(i) - free and frank provision of advice
Section 30(b)(ii) - free and frank exchange of views for the purposes of deliberation
Section 33 (1)(b) - Commercial interests
Section 36 (1) - Confidentiality in legal proceedings
Section 38(1)(b) - personal data relating to third party


The reasons why these exemptions apply are explained in Annex B to this letter
Annex A
Ferguson Marine: documents

I refer to Transport Scotland Voted Loan letter dated 15 May 2018 which details the loan funding offer for the construction of the two 100m vessels and attached to this letter is Appendix A which details the payment schedule. (This document can be found by following the undernoted link to the Scottish Government website.)
https://www.gov.scot/binaries/content/documents/govscot/publications/transparency-data/2019/12/ferguson-marine-key-documents-2018/documents/may-2018/ferguson-marine-voted-loan-letter-from-ts-to-cmal-including-calmac-costs---15-may-2018/ferguson-marine-voted-loan-letter-from-ts-to-cmal-including-calmac-costs---15-may-2018/govscot%3Adocument/Ferguson%2BMarine%2B-%2Bvoted%2Bloan%2Bletter%2Bfrom%2BTS%2Bto%2BCMAL%2Bincluding%2BCalMac%2Bcosts%2B%25E2%2580%2593%2B15%2BMay%2B2018.pdf

I now write to confirm that Caledonian Maritime Assets Ltd (CMAL) has drawndown £82,500,000 in loan funding from Transport Scotland in respect of 801 (MV Glen Sannox) and Hull 802. In addition, CMAL and CalMac Ferries Ltd have received £2,040,000 and £807,924 respectively in respect of project costs. Project costs include:-

  • Variations to Contract
  • CMAL staff and CMAL on-site staff at the shipyard for 4 years
  • CalMac staff
  • Insurance
  • Legal
  • Consultancy

CalMac’s contract with Transport Scotland (TS) for delivering the Clyde and Hebrides Ferry service (CHFS) assumes that there will be no changes to vessels or ports. This means that wider strategic changes such as overseeing the introduction of new vessels into the fleet are not included within the scope of the contract. As this work is performed at the request of and as specified by CMAL/TS, Transport Scotland provide funding to CalMac, either direct or via CMAL, for the work that needs to be carried out to prepare the vessels for service. The work involved includes providing operational input into the vessel design, assessing proposals for operational feasibility, conducting simulator testing, preparing documentation, and attending meetings, all of which is at CMAL/TS direction.
Documents describing key events leading to Ferguson Marine being taken into public ownership have been published on the Scottish Government website.
These documents cover the period from 2015 when Ferguson Marine Engineering Limited (FMEL) was awarded contracts for two ferries by Caledonian Maritime Assets Limited, to August 2019 when FMEL entered administration.
The published material describes the key events leading to Ferguson Marine being taken into public ownership, and demonstrates the extent of our interventions with the business.
Some sections of the documents are redacted for data protection reasons and other sections are redacted due to commercial or legal confidentiality. This material can be found at:-
https://www.gov.scot/collections/ferguson-marine-documents/
and
https://www.gov.scot/news/ferguson-marine-update/

Caledonian Maritime Assets Ltd (CMAL) website
In addition, please also find links to the Caledonian Maritime Assets Ltd (CMAL) website where additional information on their projects can be found :-
https://www.cmassets.co.uk/
https://www.cmassets.co.uk/project/100m-dual-fuel-ferries/

Freedom of information
I hope that the published information answers your FOI request, however, if you require further project details please send your FOI request directly to CMAL at the following email address:- FOI@cmassets.co.uk

Scottish Government Loans
The Scottish Government provided two commercial loans, totalling £45 million, to FMEL. The first of these was an unsecured loan of £15 million to FMEL in September 2017, to aid cash flow for the vessels under construction and to allow the business to diversify.
A second loan by Scottish Ministers of £30 million was agreed in June 2018. The purpose of the loan was to fund FMEL to assist with cash flow and assist diversification of the business. The second loan secured all funds owed to Scottish Ministers and created the potential for the loans to be converted to equity in FMEL.
As of April 2019, the full value of loans have been drawn down by the business.
The Scottish Government is committed to full transparency around this matter and has released a suite of documents describing key events leading to Ferguson Marine being taken into public ownership.
Some of the information you have requested is available from https://www.gov.scot/collections/ferguson-marine-documents/. Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you.

Costs since Ferguson Marine was brought into public ownership
We have paid the sums shown below since Ferguson Marine was brought into public ownership

Payment description Amount
Ferguson Marine (Port Glasgow) (FMPG) £7,569,276.63
Crown rent and registration £7,415.00
Land and Buildings Transaction Tax £244,924.64
Ferguson Marine Engineering Ltd (FMEL) (in administration) £748,048.57
Total amount (as at 27/01/20) £8,569,664.84


Annex B
REASONS FOR NOT PROVIDING INFORMATION
Exemptions apply, subject to the public interest tests.
Section 25(1) - information otherwise accessible
Section 30(b)(i) - free and frank provision of advice
Section 30(b)(ii) - free and frank exchange of views for the purposes of deliberation
Section 33 (1)(b) - Commercial interests
Section 36 (1) - Confidentiality in legal proceedings
Section 38(1)(b) - personal data relating to third party


These exemptions apply for the following reasons, the information is otherwise accessible, disclosure would, or would be likely to inhibit substantially the free and frank provision of advice and exchange of views for the purposes of deliberation and discussion. These exemptions recognises the need for officials to have a private space within which to discuss issues and options with colleagues and stakeholders, in this case Caledonian Maritime Assets Ltd. Disclosing the content of these discussions will substantially inhibit such discussions in the future, because these stakeholders will be reluctant to provide their views fully and frankly if they believe that those views are likely to be made public.

In addition, exemptions applies to some of the information which is commercially sensitive and confidential because the release of certain financial information relating to the vessels could adversely affect future dialogs that Caledonian Maritime Assets Ltd may have with other parties which would be likely to prejudice their commercial interests.

Lastly, an exemption for personal information applies to some of the information because it is personal data of a third party and disclosing it would contravene the data protection principles in Article 5(1) of the General Data Protection Regulation and in section 34(1) of the Data Protection Act 2018. This exemption is not subject to the ‘public interest test’, so we are not required to consider if the public interest in disclosing the information outweighs the public interest in applying the exemption.

Public interest test
These exemptions are subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemptions. We have found that, on balance, the public interest lies in favour of upholding the exemptions. We recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate. However, there is a greater public interest in allowing officials, stakeholders a private space within which to communicate.
We consider, therefore, on balance, that the public interest in release is outweighed by that in favour of upholding the exemptions.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.

Contact

Please quote the FOI reference
Central Enquiry Unit
Email: ceu@gov.scot
Phone: 0300 244 4000

The Scottish Government
St Andrews House
Regent Road
Edinburgh
EH1 3DG