Ferguson won a £97m fixed-price ferry deal, doubled the cost and lost the yard

In 2015 the Ferguson shipyard in Port Glasgow won a £97 million contract to build two new ferries for CalMac's Arran and Hebrides routes. The ships were to be a new hybrid design, powered by marine diesel oil and liquefied natural gas — and construction fell way behind schedule almost immediately.

Glen Sannox, destined for Arran, was expected to enter service in mid-2018 but remained moored at the yard; hull 802, earmarked for the Skye, Harris and North Uist route, slipped to 2023, with costs doubled. In 2019 the yard collapsed owing more than £49 million to the Scottish government and went into administration, then into public ownership in August 2019.

Companies House accounts published in April 2021 showed Ferguson Marine (Port Glasgow) Holdings recorded a £100 million comprehensive loss between August 12, 2019 and March 31, 2020. Turnaround director Tim Hair — paid £790,000 a year, £2,565 a day, to run the yard for the government — attributed the figure to accounting treatment of the contractual arrangements inherited at nationalisation, saying it would be reversed the following year.

The underlying numbers barely moved: Hair put the total cost of remedial work to complete both vessels at £110.3–114.3 million. A December 2020 report by Holyrood's rural economy and connectivity committee called the ferries' procurement 'a catastrophic failure' and the process 'not fit for purpose'.

Costs doubled from £97m; the yard collapsed owing more than £49m to the Scottish government; a £100m comprehensive loss was recorded after nationalisation

The yard committed to a fixed £97m price for two first-of-a-kind hybrid LNG vessels, leaving no room for design risk.

A 2018 delivery date slipped by years on both hulls while costs doubled past the contract price.

The cost overrun proved fatal: the company that had underpriced the risk went into administration owing £49m+.

Nationalisation transferred the failure to the public balance sheet, where the loss appeared as £100m on day one.

Fixed-price contracts on unproven designs price in optimism, not engineering reality — and the party left underwriting the risk eventually owns the asset.

As of the BBC's April 30, 2021 report: Glen Sannox and hull 802 were expected in 2022 and 2023 respectively, with remedial costs of £110.3–114.3 million unchanged; the yard was recruiting 120 extra workers; Hair maintained the 2020 loss and projected 2021 profit were 'simply accounting matters' with no impact on completion costs, while MSPs had already branded the procurement a catastrophic failure.