 The next item of business is a statement by Kate Forbes on Ferguson Marine updates. The Cabinet Secretary will take questions at the end of her statement, and so there should be no interventions or interruptions. I call on Kate Forbes, Cabinet Secretary. Thank you, Presiding Officer. Today's statement is in response to the report published today by Audit Scotland and the updated ferries delivery schedule from the chief executive of Ferguson Marine, a copy of which has been sent to the Net Zero Energy and Transport Committee today. We are crystal clear in what we expect from Ferguson Marine in terms of delivering 801 and 802, as well as turning the business around to be competitive. I recognise the critical nature of completing 801 and 802 for the sake of island communities coming from the highlands and islands, as other members do. Many of my family members and friends are dependent on lifeline ferry services, so there is an urgency and a necessity in delivering these vessels as quickly as possible. We do not manage the yard directly, but the chief executive is accountable to the board, and the board is ultimately required to deliver on our clear expectations for the business. I meet with the chief executive on a fortnightly basis and with the chair every six weeks to press the board and the management to drive the programme as hard and as fast as possible to successfully complete the vessels. Let me be clear with Parliament today. I expect the yard, as a priority, to complete those vessels successfully and at the fastest, most achievable pace. I expect the yard to turn around its operations so that it is competitive, productive and efficient, and I expect the yard to win and secure a further pipeline of work on the basis of its operations. I also meet with trade union representatives and the workforce and have heard first-hand the impact on their morale of those challenges and the very public criticism of the yard. Many of them have worked in the yard for decades. They know their trade, they know the yard, their insights have been invaluable. The Parliament knows the challenges that we took on when we rescued Ferguson from administration in 2019, but we saved hundreds of jobs and the future of commercial shipbuilding on the Clyde. It was the right thing to do. We stand by our commitment to the shipbuilding communities in Inverclyde and our island communities that rely on the vessels that the yard will deliver. The challenges have been great. The initial report on the state of the yard in December 2019 set out the scale and the depth of the business turnaround required to put Ferguson Marine on to a stable footing. Covid has undoubtedly slowed the turnaround efforts. The yard has twice had to shut down due to Covid and has worked at a reduced capacity for many months as a result of the necessary distancing requirements in place. Despite that mammoth task, progress is being made. A new permanent chief executive has been in post since February with fresh eyes and a new approach. He has created a more collaborative culture, working more closely with CMAL, who, as it is well known, had differences of opinion with the Ferguson leadership about progress at the yard. The chief executive has bolstered his senior team with an experienced secondi from CMAL, embedding a closer relationship directly within the yard. Crucially, the Ferguson Marine team is actively pursuing vessel opportunities and is back to being a serious contender for future vessel contracts. It also goes without saying that progress has not been as fast as we would have liked, largely due to on-going legacy issues. The then turnaround director of Ferguson's wrote to the committee on 9 February, highlighting a legacy issue around cabling, which would impact on the vessel's schedule and cost. Those problems happened before Scottish Government ownership, and while the board has no visibility on work that happened before we brought the yard into public ownership, it is important that lessons are learned. The chief executive of Ferguson Marine has written to the committee today, quantifying the impact of that legacy issue. As part of his consideration of the delay associated with the legacy cabling, the chief executive has critically reviewed the delivery schedule in its entirety. The cabling issue will cause a direct four-month delay on vessel 801. The chief executive believes that, given the emergence of those legacy issues, an additional four months is required, so his letter sets out that there will be a maximum delay of eight months in the delivery of 801. Delays on 801 will inevitably lead to delays on 802. Ferguson Marine believes that they can reduce that delay on 802 to six months, so that means that 801 will be delivered between March and May 2023 and 802 between October and December 2023. Those estimates have, importantly, been developed in collaboration with CMAL. I won't rehearse my frustration, and I know the chamber's frustration with this updated timetable. The Ferguson Marine board and chief executive are aware of the depth of my dissatisfaction with the emergence of the cabling issue and the knock-on impact to the timetable. I have made it very clear that those vessels must be delivered in line with the schedule. There is also a cost increase that comes with the extension of the programme. The chief executive has confirmed an additional £8.7 million. Of that cost, £825,000 directly relates to the cabling. 7.875 million relates to overhead, labour and material costs associated with the new schedule. As such, the cost to complete the ferries will increase to between £119 million and £123 million, and I have agreed to additional funding to ensure that those vessels are completed. I am also taking the opportunity to make provision for previously unbudgeted warranty costs of £3.5 million to provide a builders warranty and warranty cover in respect of equipment for which warranties have time expired. That is completely separate to the cabling and the schedule costs outlined above. The warranty costs were not unknown, but in the spirit of transparency I wanted to quantify those costs. Turning to Audit Scotland's report on the arrangements to deliver the ferries now, the report reflects fairly on the complex issues that have mired the history of the build-out of the ferries and underpin many of the legacy issues that Ferguson's are dealing with today. The report states that the turnaround of FMPG is extremely challenging and it highlights that FMPG has implemented some of the significant operational improvements that were required at the shipyard. Nonetheless, there is no denying their view that, and I quote, work on the vessels has taken longer than expected and Covid-19 has delayed progress. I fully accept the Audit Scotland report recommendations on Ferguson Marine in public ownership. Work is under way on a number of recommendations already. Collaboration between Ferguson Marine and CMAL has been strengthened considerably, officials are working with Ferguson Marine on their business case for investment and will continue to work with them to deliver a competitive and sustainable business. The Audit Scotland report makes reference to a range of reports and an appropriately complex governance structure. In the interests of openness and transparency I will later today proactively publish documents on the Scottish Government website. Those and other contextual information will, I hope, help those with less proximity to the issues to understand the full picture. I know that there is a shared belief across this chamber in the importance of those vessels and it is critical that we see them in service as soon as possible for the benefit of our island communities. I reiterate today that there are no ifs, there are no buts. Those vessels must be completed and they must be completed as quickly and as effectively as possible. The board and the leadership of Ferguson Marine know where I stand on this issue. They expect to be held to account for delivery of these critical ferries in line with the new schedule that they have communicated to Parliament today. Until those vessels are serving the communities for which they were built, we will not let up in our drive and determination to get them finished. I thank the cabinet secretary for advance sight of her statement and a copy of the letter that was sent to the net zero committee. The Auditor General's report is scathing and it should make uncomfortable reading for ministers and, frankly, they should be ashamed. Now we learn from the cabinet secretary that there will be extra costs involved in the project to deliver ferries 801 and 802 of at least £8.7 million and further delays. I'm not going to give a big preamble here because we're coming on to a debate later so I've just got a few questions. There is a bit of confusion over costs based on what the cabinet secretary has told us and based on what is in the Auditor General's report. The Auditor General says that the total cost of the project is currently estimated to be at least £240 million and that is significantly more than what the cabinet secretary has told us. I also want to ask about the cabling. Now who's to blame for that? The cabinet secretary seems to be suggesting, now I may have this wrong, that it was the people who put the cabling in. I don't think that's true. I think the problem happened after the cables went in but the cabinet secretary can give a clear and simple answer to that. Finally, on the report from the Auditor General, why did ministers ignore the advice of CMAL not to award the contract of Ferguson's and will the cabinet secretary now agree to hold a public inquiry? I will try and be quite brief with my answers but I do want to do those questions justice. On the point about costs, the cost that I was citing is the cost to complete the ferries versus what was communicated to Parliament in December 2019. On the overall cost, the member is right to cite the Audit Scotland figures on the overall cost. The cost that I am updating Parliament on, which I cited the total additional cost associated with the letter that has been communicated to Parliament today, will therefore be between the £122.5 million to £126.5 million. That includes the entirety of the cost, both in terms of the warranty, the update today and the cost that had previously been communicated to Parliament for completion of the vessels. If there is still confusion over that, it is quite easy for me to just set it out in perhaps a written communication to the member. On the cabling issue, the cabling issue very much was entirely related to legacy cables. The cabling was installed by FML contractors in late 2018 and early 2019 entirely prior to the yard coming into public ownership. It was during planned electrical works for 801 that the issue was discovered by the yard in terms of the length of the cabling. The legacy cables issue relates to cables that were not already planned for replacement too. I want to be clear that the legacy issues prior to the yard coming into public ownership are in the process of commissioning the vessel in discovering where there are still issues. The cabling was installed by a reputable contractor and the yard had no reason to suspect that there was a problem with the cabling until it started to connect the equipment. On the two final questions, he asks about an inquiry. Obviously, the Audit Scotland report, which has been conducted, is comprehensive. I think that it's thorough and I think that it's fair, as I've already said. We've also had the Scottish Parliament report to an inquiry, which I know was chaired by his colleague Edward Mountain. There have been two fairly thorough inquiries into the issues. The last point that he asked about was about interventions, if I could recall correctly, by the Scottish Government at an earlier point. He's shaking his head. I think that I've answered the three questions. I thank the Cabinet Secretary for Advanced Sites of our statement. The only problem is that islanders have heard this all before—more delays and rising costs. The ship has sailed on SNP excuses. From the very start, ministers did not put in place the normal financial safeguards. Why? Can we get the latest total cost for both ferries in writing today? It's time for this Government to take responsibility. The Cabinet Secretary says that he's holding the new board accountable. I'm sorry, it's the Cabinet Secretary who is accountable. We've heard again the tough talk of no ifs, no buts, and those ferries must be delivered as soon as possible. Those ferries are already estimated to be five years late. The reality is that the only chance that islanders are going to see a new ferry this year is to take a holiday to Marmaris. The question for the Cabinet Secretary is whether she's going to stake her reputation on this, or is that just more words again? If it's not just words, can Kate Forbes confirm that if those ferries are not ready by May and December 2023, then she will resign? If she's not confident enough to stake her position on this, why should any islanders have any confidence in what you are saying now? And what is the point in being responsible for this if you're just going to keep passing the buck? Cabinet Secretary, can I remind the member that for the last five years I have represented communities that rely on lifeline services? I am accountable to them as we all are at every election. In terms of the tough talk as he cites it today, it's quite clear what we have committed to today. The chief executive has updated Parliament in terms of the updated schedule. Critically, and perhaps this is fairly new, that has been endorsed by CMAL. It is CMAL and Ferguson Marine working together to ensure that we have a schedule that is achievable, that we can stand by and costs to deliver. I have been clear with them that we expect that schedule to be delivered. I have set out the reasons for that schedule as per the chief executive's letter. I have broken down the costs. As I said to Graham Simpson, if there is still confusion about the costs, I am happy to ensure that that is committed to paper so that he has full understanding of it. I welcome the clarity in the minister's statement around why we are, where we are and how we will move forward. When the Glen Sannocks in 802 were ordered, my iron constituents looked forward to a state of the art vessel serving island that would be much more resilient and reliable in bad weather. Can she confirm that, when the boat enters service, that will indeed be the case? Yes, is the short answer. Communities can take confidence that those vessels will perform in service and improve the network. They will not enter service without rigorous assessment that they meet the required specifications by CMAL who maintain a presence in the yard as advisers to the Scottish Government. The vessels will not be handed over for delivery unless they are satisfactory and can deliver the requisite service. Also, they will not be able to enter service until they have received all the clearances that are required by the maritime and coastguard agency and class society approval from Lloyd's register. I hope that that gives Mr Gibson the clarity that he needs and a reminder too that, when those vessels are delivered, they will aid my island constituents as well. Liz Smith, to be followed by Alistair Allan. Cabinet Secretary, the whole ferry's fiasthow comes hard on the heels of plenty of other examples of SNP mismanagement of taxpayers' money. Bifab, Prestwick, Rangers administrators to name just three and Audit Scotland's concerns that there isn't sufficient transparency from Scottish Government ministers about public spending. Will the Scottish Government commit to Scottish Conservative plans that the ministers should be opening the books on a regular basis and that we should have a formal finance bill procedure in this place so that we can scrutinise effectively what the Government is spending taxpayers' money on and that this kind of fiasthow never happens again? Liz Smith, for those questions, there's obviously a recommendation from the Audit Scotland report that we accept and agree with in full around transparency and accountability, particularly when it comes to investments made in private businesses. They call on us to, in line with the new framework for investing private businesses, improve the transparency of our investment decisions. Work is on going, we've already made changes and happy to update the member when that is fully complete. In terms of more general commitments, I would take some issue with her suggestion that work to complete the vessels and work to save the yard is, in her words, a waste. I stand by the decision that we must complete those vessels, we will complete those vessels and we have secured the future of the yard and I think that money is important money to spend in completing those vessels. The cabinet secretary will, I know, be aware of the pressures on existing services and vessels in North East and Harris, which delays that Ferguson's have certainly contributed to and the human consequences of that. Can the cabinet secretary give an indication of how the new vessels will be utilised to alleviate some of those pressures and problems in my constituency and elsewhere? The member is right in highlighting the vital role that those vessels play and also confirming why it is critically important to pursue completion of those vessels, contrary to what some others might suggest. Those who are most affected by the delay are clearly those who live in his constituency and other constituencies along the west coast in particular. We need those vessels to provide additional capacity, we need them to provide resilience and we are already carefully considering the best deployment options in discussing with Calmax, CMAL and other service users. There are options that include potential for a two vessel service, for example for Harris and North East on the Sky Triangle. Roots is previously raised by those communities, although further consideration is required around the operation and the affordability of that proposal. There is also the opportunity to consider maintaining a relief vessel in the fleet for a period of time. My last point in response to the question, in advance of the new tonnage being made available, we also have the new vessel in the form of the MV Loch Frisa, which is expected to enter service soon, improving the Cregnure-Oben route, particularly in the winter, and allowing additional sailings on the Loch Boysdale to Mallig route and additional capacity on the Mallig to Armadale service. Rhoda Grant, to be followed by John Mason. We all know and the cabinet secretary knows that the blame for this fiasco sits squarely with her government. Can she now guarantee to this chamber that those boats will come into service for our island communities? I can confirm, as I said in my statement, that we are committed to getting those vessels completed and delivered. As I said, there are some who would rather we had given up, we have not given up and we stand by our commitment to deliver those vessels. John Mason, to be followed by Willie Rennie. We absolutely must keep commercial shipbuilding on the Clyde. The cabinet secretary in her statement mentioned the skills that the current workforce has. Can she say anything about maintaining those skills and building going forward, for example, with apprenticeships? Ffarrs and Marine boasts an impressive apprenticeship programme, and it is also worth saying at this point that, although the work conversation that we are discussing now is focused on the completion of the two vessels, 801 and 802, since nationalisation, the yard has delivered three smaller vessels, hull 803, hull 804 and hull 805. Mae cyfleidau i'r cyfleidau 43 ac yn ôl o'r cyfleidau ffair i'r cyfleidau ffair, oherwydd y gweldig, yw'r ffabricau, yw'r mecanicl, yw'r ffiting, i'r ffair i'r ystafellau i'r cyfleidau 38, yw'r cyfleidau i'r Svq3. A oes y rhan o'r cyfleidau yw'r cyfleidau 15 oes yn y programme. Willie Rennie, sy'n gydig i ddwy i dda i Mcmillan. Mae ydw i'n gweithio i'r cyfleidau i ddydd i ddysun i'r cyfleidau i'r ferys Theascal. Mae'r fferys wedi gweldio i gyfnodd iawn i seymail, yn gweithio i'r gwnaeth, byddio'r cymdeithasol byddio'r gwnaeth, a'r cymdeithasol byddio'r gwnaeth yn gweithio'r gwnaeth, ond nid yn gwneud yn gyfnodd iawn. Rwy'n meddwl, fyddwn ni'n gweithio'n gweithio'r gwaith ymweld, rydyn ni'n gallu rhaid oherwydd i gyfnodd iawn? Ond, mae'n gilydd, roi'n ddim yn gwych am fyddai? Gallai rhan調es i fyfyd, nid yn gwych i amser ac yn rwyf ddylai fy mud yn ddifu'r amlwg lleiwyr o'r cydweithio'r autaeth a'u tudio'r buselaf mewn ddylai gwych o'r bwysig i'r perfectioniadau a'u gweld o hyn sy'n ddim yn ddylchi'r arfa, maen nhw'n ddylchi'r ddylu'r yn ddylchi'r ysgrifennu gweld o fod. Fe ydym i'n ddylchi'r ysgrifennu gweld o'r by the decision in 2019 for us to step in and ensure that those vessels weren't lost and neither were the jobs. Stuart McMillan, to be called by Maggie Chapman. First of all, I welcome the second day from Seymal to Ferguson. He certainly will help with what the job needs to be going forward. It's important that the Scottish Government certainly is clear in its expectations of the yard, and however does the chief executive, the new chief executive, he's only recently been appointed. Does the cabinet secretary agree that it's now important for him to be given the time and the space and the support as he begins to actually get the yard back on track? Stuart McMillan raises an important point, that ultimately, when it comes to our debates and our discussions about the yard, it's important that that is informed by those who are actually working on the ground in the yard. That includes worker representatives, employees more generally, and it includes leadership at the yard. We've set out, and I've set out again what my priorities are for the yards management. We're engaging regularly with the new chief executive and a shareholder. We will continue to support the yard in achieving their goals in any way we can. I reiterate the point that I made today. The boats must be completed as quickly as possible. The board and the leadership of Ferguson Marine know where we stand on this. They have a plan in place. They have made substantial changes already. There's already progress being made against Audit Scotland's recommendations. We will continue to build on that progress. Maggie Chapman, to be called by Jenny Minto. The recent appalling behaviour by P&O ferries bosses highlights the weaknesses of poor management and oversight of vital transport services, and it points to the need for very strong industrial relations. The cabinet secretary mentioned regular meetings with trade unions and their clear skills and expertise. How can we ensure that those workers play a key role in future work vital for the long-term sustainability of the yard and of their jobs? How can we reassure those who rely on lifeline ferry services that the deprioritisation of service support in next year's budget won't have a negative impact on delays and costs escalations announced today? The cabinet secretary said in my statement that the input from workers and trade union representatives has been invaluable as we try to get to the bottom of what's needed in terms of making progress on the yard. I've certainly valued their input and valued meeting with them directly at the yard itself. The input of management and the input of CMAL has all ensured that we have been able to make progress. Clearly, we need to build on that and complete the vessels. Ultimately, in terms of our three priorities for the yard, one of which is completing the vessels, one of which is turning around the yard, the third is saving the jobs. Had we not intervened, that would not have been the case. Jenny Minn told to be called by Jamie Greene. To successfully win new contracts, it's important that work continues to increase the yard's efficiency and competitiveness. Can the cabinet secretary provide an update as to the steps being taken by Ferguson's to improve its competitiveness? Cabinet secretary. The best way to secure a sustainable future for the yard is ultimately to ensure that it can compete for contracts on merit. We're working with the yard to support its development of a business case for investment to help to improve competitiveness. Again, one of the recommendations for the Audit Scotland report and driving up productivity day to day is rightly an operational matter for the yard. I know from my regular discussions with the chief executive and the chair that the yard is already doing that as part of the programme reset. The yard has set quite clear targets for more efficient workpack planning so that use of labour and materials is better focused. One small example is the creation of the permit to work office on ship, so walking on-off ship is minimised. There has been a lot of investment, a lot of progress, we need to keep driving ahead though so that they can secure a long-term future. Jamie Greene to be called by Katie Clark. Here's a straightforward question. If the Scottish Government is so keen to see Scotland's shipbuilding proud history flourish in a modern age, then why on earth will we build our new fairies in Turkey and not in the Clyde? Two points I'd say in response to Jamie Greene. Based on some of his colleagues' questions this afternoon, some might assume that he would rather have seen shipbuilding on the Clyde shut down a number of years ago. There is an irony at the heart of that question and it's through the Government's interventions that we have protected shipbuilding on the yard in the first place. The second point though is in terms of the procurement that he talks about. Fergs and Marine are currently working to complete the two vessels right now. That is important for island communities that those vessels are completed and they are finished. It's also important that we don't wait to procure two new vessels, I'm sure we'll hear over the course of the debate this afternoon, how critical it is that we supplement the vessels that are available just now. We have progressed with procuring these two new vessels and I don't think that island communities want to see us wait. Katie Clark to be followed by Liam Kerr. Islanders on Arran and indeed on other islands were asking for smaller vessels. Does the Cabinet Secretary now agree with the views of many that Fergs and Marine should have been awarded contracts for smaller, simpler ferries for those islands, which could have been constructed far more speedily? As I said and the member is right, they have in the period since nationalisation completed three smaller vessels. That demonstrates that there is skills, there's capability at the yard. In terms of ferry policy, and I'm sure the debate this afternoon will cover that in more detail, it's important that communities' needs are taken into account when it comes to procurement and design. That is essential. The vessels need to be built for the purposes for which they were built and where smaller vessels are more important, we should go with that rather than building a vessel around a yard's capability. Given that the warranty on the engines for 801 and 802 has lapsed, when did the Scottish Government first become aware of the potential issues with the dual-fuel engines? Can the cabinet secretary comment on claims that they are now old technology, given that they're already seven years old? I think I've answered our written question actually from the incur fairly recently on this same question. He'll have it in writing, but I'm happy to respond again just now. In terms of the provision that I've announced today for unbudgeted warranties on warranty-expired equipment at builders warranty, those were already known about, but what we've done today is announced an estimate based on a percentage, 5% of the £70 million equipment costs just to ensure that there is as much transparency as possible around costings. When the vessels begin commissioning, which at the moment is targeted for May, that's ultimately the test of equipment on board, equipment that may not have been used because the vessels are being constructed. That's why the updated schedule today takes into account the need to test legacy issues. That concludes the ministerial statement on Ferguson Marine update.