The Government of Scotland is exploring options to bring Ferguson Marine shipyard under state ownership after the yard announced plans to go into administration due to mounting losses.

Situated on the bank of River Clyde, the shipyard has a workforce of 350 people. It has been in a long-term dispute with the government over a £97m contract to build two ferries for Caledonian Macbrayne for government agency Caledonian Maritime Assets Limited (CMAL).

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The contract to build two 100m passenger and vehicle roll-on roll-off (ro-ro) ferries was awarded in 2015.

They were intended to operate on a low-carbon system of diesel-electric and battery power for the Clyde and Hebrides Ferry Service.

However, construction of the vessels is behind schedule. The budget of the hybrid vessels has also increased.

The shipyard said that the delay is due to changing the design of the ship, as requested by CMAL. The cost of constructing the vessels has increased by £90m, which the CMAL did not agree to pay.

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As a result, the shipyard, which secured £45m in loans, is on the verge of losing £40m on the deal.

Commenting on the situation, Scotland finance secretary Derek Mackay said the government was committed to the future of shipbuilding at the Ferguson Marine Engineering yard at Port Glasgow.

An official government statement said: “Our priority is to ensure the completion of the vessels under construction, secure jobs for the workforce and protect the future of shipbuilding at the site.”

If Ferguson Marine, Clyde Blowers or ‘any other party’ did not provide the funding support, the government was ‘actively considering other options, including public ownership’.

GMB union Scottish secretary Gary Smith said: “This is a very valuable yard and a national asset. Public ownership is the only way to keep this commercial yard in operation.

“Although there has been trouble over this one contract, there is a prosperous future and 20 years of work in building ferries.”

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