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Bifab: Government will only release legal advice under judicial review

bifab-legal-advice
The Bifab yard in Methil, Fife

The people of Fife and Lewis are being let down by a continual “blame game” over who is at fault over manufacturing company Bifab, it has been claimed.

The Fife-based company lost out on two of Scotland’s biggest offshore wind turbine contracts — NnG and Seagreen — after work went to overseas companies.

Developers SSE and EDF said they were forced as a result of the UK Government’s Contract for Difference to choose the cheapest bidder — which they say nearly always results in overseas companies being used.

Unions are repeating calls to the Scottish Government to release legal advice received ahead of pulling support for the company.

Scotland is a world leader in production of offshore wind and a world loser in generating jobs for this country.”

Helen Nolan, GMB union

Committee meeting

Jason Fudge, president  of Bifab owners DF Barnes (which is a subsidiary of JV Driver), was questioned by MSPs on the economy committee on Tuesday morning.

He refused, under repeated questioning, to say how much the company had invested in Bifab after becoming majority shareholder in 2018.

The Scottish Government, as a minority shareholder and primary financier, ploughed £37 million of public money into the failing organisation in 2018 to guarantee the completion of the Beatrice contract.

Last week Economy secretary Fiona Hyslop said there would be no more financial support for Bifab from the Scottish or UK governments.

Mr Fudge told the committee work lost at the yard was as a result of overseas companies offering cheaper work.

He said: “I can’t tell you how much we invested in terms of dollars. We invested a huge amount of time, resources and people.

“We spent more than half of our time involving ourselves with management of Bifab, actively supporting their bids..

“Our project management team came over (from Canada) to support the pin files project, we invested in training and worked very closely to make sure there was an appropriate amount of investment into the yards to be successful.

“None of our pursuits were ever “not awarded” because of lack of infrastructure or lack of investment in Bifab.

“They were always lost because of competition from foreign investors.”

Legal advice not forthcoming

Hazel Nolan, of GMB Scotland union, also provided evidence to the committee. She said calls are still being made for the Scottish Government to release its legal advice surrounding the Bifab decision.

Ms Nolan told the committee economy secretary Fiona Hyslop would only do so if ordered to by judicial review.

Hazel Nolan.

Hazel Nolan said: “We were promised 120,000 renewables jobs 10 years ago. We have a couple of thousand in construction and the whole sector in the low carbon and renewables economy has around 20,000 jobs.

“We are over 100,000 jobs short of predictions made.

“It comes down to holistic lack of strategy at UK and Scottish government levels.

“However disappointing NnG and Seagreen being missed out is, there has been a litany of contracts missed out on.

“If you look at countries like France, who have been historically reliant on nuclear and have arrived late with renewables, they have made it clear if you want contracts off-shore you need to build the products in France.

“There is also the environmental impact of putting these jackets on diesel ships and sailing them across the world, which needs to be taken into account.

“Scotland is a world leader in production of offshore wind and a world loser in generating jobs for this country.”

Blame game will not deliver jobs in Fife and Arnish

Commenting afterwards, Scottish Greens MSP Mark Ruskell said: “A blame game between Bifab’s owners and the Scottish Government won’t deliver jobs for Fife and Arnish.

“The Scottish Government must step up and become a majority shareholder in Bifab as soon as possible.

“Simply hunting around for another private company to pick up the reins at Bifab will not result in a recovery for the company; the Scottish Government owns the yards already, it should take the future of the workforce into its hands as well by becoming a majority shareholder able to make key decisions at board level.

“On the April 17 2018, then-cabinet secretary Keith Brown told this chamber ‘we are confident that Bifab has a bright future’, saying that the ‘agreement gives the workforce, the company and the Government the best possible chance of securing a vibrant future for the yards’.

“It is understandable, then, that the workforce and communities in Fife and Lewis feel bitterly let down by this most recent betrayal by the Scottish and UK governments.

“Yesterday, at her party conference, the First Minister spoke of creating green jobs, but the SNP has failed to show how it will rebuild confidence in the sector.

“Ministers must act urgently to guarantee manufacturing jobs in Fife and Lewis for the long term. We have the skills, the expertise, the facilities and the people. As the GMB union has said, all that’s missing is political will from the government.”

‘Political will is there’

Economy secretary Fiona Hyslop insisted the Scottish Government has the “political will” to support the renewables sector.

She said: “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 working capital investment or guarantees for the company.

“As a minority shareholder, we have been exhaustive in our consideration of the options that are available to us to financially support BiFab.

“As requested, we have worked collaboratively with the United Kingdom Government to explore what investment was possible in terms of working capital and guarantees, but we have not identified a legally compliant way to support the business.

She added: “One of the original issues with Bifab was concerns around the Beatrice contract.

Fiona Hyslop.

“Indeed, the Scottish Government took on the main responsibility for financing that contract. We then converted our loan into equity to support the newly acquired Bifab acquisition by JV Driver.

“The business plan for the original agreement had a number of factors, including a commitment from JV Driver to provide working capital investment and guarantees, and to use its parent company for acquisition of bonds and assurances.

“The second point is about shares and whether the transfer of shares would have provided an opportunity for legally compliant investment.

“On a number of occasions, we have examined and exhausted many different ways of providing investment for the company, including state ownership, which would obviously mean the transfer of shares to the Scottish Government.

“Even that would not allow us to invest further in the company.

“The idea that somehow that would have provided the Scottish Government with more flexibility to invest further capital in the company is not the case.”

She continued: “The political will is absolutely there. I am personally committed. When you look at the statements that have been made previously, you can certainly see that there were initial contracts that could have been assured.

“Indeed, even as recently as this time last year, there was a prospect of Seagreen and Neart na Gaoithe (NnG) contracts.”

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