The owner of troubled Scottish manufacturing firm Burntisland Fabrication (BiFab) has accused the Scottish Government of failing to deliver the financial support it promised when it took over the company.
In a three-page letter, Canadian firm JV Driver, which took majority control of BiFab in 2017 through its subsidiary firm DF Barnes, claims there was an understanding the Scottish Government would be the “primary financier” of the company – but said it has “provided less than 50%” of the financing requested.
The Scottish Government’s announced it would pull support for the firm in October, citing state aid rules.
It is understood to have resulted in the loss of a lifeline deal to provide North Sea turbine jackets and placed future work at the firm’s yards in Arnish, Methil and Burntisland in jeopardy.
A joint statement by the Scottish and UK Government on Tuesday claimed there was “no legal route to provide further financial support to BiFab”.
BiFab was rescued from the brink of administration by the Scottish Government in a £34 million agreement in 2017 before being purchased by Canadian firm DF Barnes in April 2018, although hundreds of jobs were shed.
A loan facility of £15 million was also provided to support working capital at the firm, which at one time employed almost 1,400 staff.
Workers unions said the decision to pull finical support has eroded “trust” in both the Scottish and UK Government and called for Scottish economic secretary Fiona Hyslop to “come clean” over the move.
Gary Smith, Scotland secretary for GMB Union, said: “DF Barnes point the finger of blame at the Scottish Government and until the Minister shares the legal advice which prompted the decision to walk away from BiFab, there can be no confidence or trust in this process.
“Scotland expects this type of behaviour from Boris Johnson but it reflects very badly on Nicola Sturgeon and Fiona Hyslop, and they can no longer cry grievance at Westminster over the failure in offshore wind when they are now acting in unison.”
A Scottish Government spokesman said Ms Hyslop has been “clear” state aid rules make “intervention impossible”.
He added: “The situation at BiFab is a culmination of a number of issues, the main one being the unwillingness of the parent company and majority shareholder JV Driver to provide the working capital investment or guarantees for the company.
“As a minority shareholder, we have been exhaustive in our consideration of the options available to us to financially support BiFab.”
