We have another two-parter this week as we take time to wrap up some loose ends! We have previously observed that the wheels of justice grind slowly, so it is time to revisit some of the long-simmering stories we have covered.
Some of these gifts have kept on giving for a decade or more – a reminder that offshore is a long cycle business, and that payback and punishment for corruption and incompetence can take years.
In October 2015 (yes, nine years ago), the Scottish Government awarded local shipyard Ferguson Marine a contract to build two dual-fuel, liquefied natural gas (LNG) ferries to service the Outer Hebrides islands for a supposedly fixed price of £97 million (which was then equivalent to US$149 million) for state-owned ferry company Caledonian Maritime Assets (CMAL). Strangely, the customer omitted to obtain a refund guarantee from the wee shipyard on the Clyde river.
Since then, the yard has gone bust, the Scottish Government has given hundreds of millions in state support, the national assembly audit committee has delivered a damning report into the project, the BBC has revealed a shockingly biased bidding process ahead of the award, several CEOs have come and gone from the yard, and the two ferries have been delayed and delayed and further delayed (see our Background reading links below). A true shambles, and an expensive one.
Not one member of the Scottish National Party government resigned over the fiasco, although the former transport secretary did resign after sending sexual text messages to a teenager, and the first minister Nicola Sturgeon quit after it emerged she had acquired a camper van with political funds.
Ms Sturgeon's husband was also arrested in conjunction with an investigation into the party finances, and her successor resigned after the party performed poorly in the July general election in the UK, losing half a million votes and 38 of its 47 seats in Westminster.
Now there is light at the end of the tunnel for Ferguson, finally.
The first ferry, Glen Sannox, has conducted daylight LNG trials with its main engines, and the ship sailed around the Firth of Clyde at 12 knots last week. Acceptance trials are set to run this week, as per The Scotsman newspaper, followed by punch-list closing back at the yard and then delivery.
There is a deadline for delivery of the ship to the state ferry operator by October 14, but based on the situation, there will be no consequences for the yard if it fails to meet this long-awaited and much-delayed target. The state-owned customer will take delivery of the ship from the state-owned yard, whenever.
The ferry will then conduct further operational trials next month, before entering service to the Isle of Arran in December. Unfortunately, it will operate from the port of Troon in South Ayrshire because the upgrading of Ardrossan harbour in North Ayrshire to accommodate the ferry has still not been approved, despite the decade of notice given that the larger vessel would serve the Arran route.
Readers can draw their own conclusions about the competence of those responsible for planning in Scotland. “Not enough time” really is not an excuse in this case.
Sister vessel Glen Rosa is now expected/hoped/prayed to enter service in 2025. Let’s see.
Now Ferguson is looking to the future. The delivery of the vessels will leave the yard workforce without work and its slipways empty, so the company is hungry for new contracts. Difficult offshore projects like walk-to-work vessels or anchor handlers have been ruled out, however, and many customers will probably be sceptical of Ferguson’s record for some time.
But the shipyard has confirmed it has entered the race to bid for a contract to build seven electric ferries for CMAL (of course) where it faced stiff competition. Business Insider reported that CMAL received 13 responses to its competitive procurement process for the £175 million (US$234 million) phase one Small Vessels Replacement Programme.
People often wonder who can replace Billy Connolly as Scotland’s greatest comedian.
Step forward Ferguson Marine interim chief executive John Petticrew. He has said the shipyard will bid “aggressively” for the CMAL Small Vessels Replacement Programme contract.
However, he then warned there could be “unfair competition” from foreign shipyards that receive state aid.
LOL. Irony isn’t dead. Maybe the US$350 million his yard received from the Scottish Government to stay afloat was a charitable donation, rather than state aid.
If Ferguson wins this next round of bidding, let’s see if CMAL demands a refund guarantee and whether the yard can deliver two vessels in less than a decade – a low bar indeed.
Unfortunately, so many examples from around the world show that state aid for shipyards is like crack-cocaine. Easy to start taking, extremely difficult to stop. Will Ferguson go cold turkey like Harland and Wolff?
Last week, the Amsterdam District Court handed down judgment in whistleblower Jonathan Taylor's case against SBM Offshore. This is the culmination of a decade of trials and fines for the Monaco-based floating production company, after its former in-house lawyer Mr Taylor blew the whistle to the authorities in the United States on US$240 million of bribes paid by the company across West Africa and Brazil over many years.
For this malfeasance, SBM Offshore was fined a total of over US$820 million in the Netherlands, the US, and Brazil. A number of former executives, including two of its former CEOs, were sentenced to prison for their involvement in the corruption.
Unfortunately, SBM Offshore gave him the classic treatment that unfortunately affects many whistleblowers – as we have covered. SBM Offshore did everything it could to silence Mr Taylor and undermine his credibility.
The company even filed charges against him for attempted extortion. The judge in Monaco ruled in 2022 that Taylor was not guilty of that claim, but only after he had been detained in Croatia under an Interpol red notice, rendering him unable to leave the country for many months.
The Amsterdam District Court has now ruled that SBM Offshore went too far in its public statements about him. SBM Offshore acted unlawfully because its director Sietze Hepkema, among others, named the charges against Mr Taylor in an interview with Dutch business newspaper NRC.
Now the Dutch court has determined that Mr Taylor is entitled to damages from SBM. The amount has yet to be determined by the District Court.
The Court has already determined in this interlocutory judgment that SBM Offshore must publish a rectification. The final judgment will determine exactly what that rectification will look like. That final judgment is expected early 2025.
“Justice at last," Mr Taylor said in an email release to Baird Maritime. "The unfair treatment given to me by SBM Offshore has had its effect. I had a very good job at SBM Offshore, but look at me now. My life has been destroyed. I am unemployed, my marriage is over, and my health has suffered badly. I even spent a year unjustly stuck in Croatia. I hope I can now put this behind me soon.”
"What a long and tough battle this is," Taylor's lawyer, Otto Volgenant of Boekx Advocaten, commented. "But in the end, justice will always prevail. SBM Offshore must compensate Taylor's damages. This is a huge victory for Taylor."
Normally we would be cynical, but this was the first of several developments which suggest that at least some of the crooks in the shipping and oil and gas industries are finally receiving their just desserts.
We will cover the rest in part two later in the week.