Scottish Government ministers "squandered" £200m of taxpayers' money on nationalising Ferguson Marine at Port Glasgow, according to its former boss Jim McColl.
He wrote to the Holyrood committee probing the Glen Sannox and the as-yet unnamed hull 802 following First Minister Nicola Sturgeon's evidence earlier this month.
The two ferries are late in being completed and could potentially cost more than £300m - three times the initial £97m contract.
Sturgeon expressed "deep regret" about the impact on island communities, but faced questions about the contract between Ferguson Marine and Caledonian Maritime Assets Limited (CMAL).
McColl claims the government rejected a call from Ferguson Marine Engineering Limited (FMEL) and Transport Scotland for an Independent Expert Determination to help with the costs, which he stated could have saved £200m.
"The Scottish Government's decision to reject Transport Scotland's proposal in early April 2018, and repeated requests from FMEL, for an Expert Determination process, unthinkingly defending CMAL, has resulted in public money being squandered on a reckless and foolish scale," he wrote.
"It also forced FMEL into administration, a business that was well invested, with a healthy pipeline of work diversifying the business away from a dependence on Scottish Government ferry work."
After it filed for administration, FMEL managers said the government had no intention of leaving it in private ownership, while warning nationalisation would subject them to EU state aid laws. Ferguson Marine was nationalised in 2019.
McColl wrote: "The government have incurred over £200m of costs since nationalising the yard and they are not finished yet; this need not have happened."
"Given senior counsel’s unequivocal opinion that the offer was legal I would have expected the government to take their own QC’s opinion - there is no evidence that they did - if the government had received an independent opinion confirming it was legal, and accepted the proposal it would have saved at least £200m of taxpayers money.
Scottish Conservative shadow transport Minister Graham Simpson said McColl's letter to the committee is a "damning indictment" of the government's handling of the situation.
"We already knew SNP mismanagement has needlessly cost the public hundreds of millions with no delivery, but these staggering revelations make it clear just how negligent they have been," he commented.
"McColl says that the First Minister can have been in no doubt about the urgency of the situation when he approached her - we should immediately see the minutes of that meeting, to clear up this murky business."
A Scottish Government spokesman responded: "The First Minister stands by the evidence, and the follow-up information requested by the committee will be provided in due course.
"The Scottish Government’s priorities have always been the completion of the two ferries, securing a future for the yard and its workforce, and supporting our island communities that rely on this type of vessel on a daily basis."
The Public Audit Committee also asked Keith Brown for details about a period in August 2015, when he was acting as transport minister, seeking information regarding concerns the then-transport minister Derek Mackay had raised with him about the procurement of the two vessels.
The committee also asked what direct action he took after hearing concerns from the ferry-owning company CMAL.
Brown, who is now justice secretary, responded to the committee’s questions in a letter.
“I have, as requested, reviewed my responses to the three questions put by the committee and I am content that those responses are accurate and that I do not have any further information to provide.”
Committee convener Richard Leonard had earlier expressed disappointment that the substantive part of a letter from Brown had amounted to only 150 words.
In that letter, Brown said he had received a written submission from Transport Scotland officials on 20 August 2015, to consider the recommendation to award the contract to Ferguson Marine.
He said Mackay approved the contract award on 9 October 2015, after a briefing was received from CMAL on their concerns and how the risks could be mitigated.
Last week, workers told MSPs that the contracts to build the ferries led to the “demise” of the shipyard, as they slated decisions taken by its previous owners.
A group of staff from the Port Glasgow shipyard took part in an informal meeting with MSPs from Holyrood’s Public Audit Committee at the end of October.
They were highly critical of management under former owner McColl, saying multiple bad decisions were made which increased costs and slowed down work.
One of these included building a funnel which had no pipes inside it - allegedly to secure a manager’s bonus - meaning the work had to be redone.
Minutes from the meeting with staff and trade union representatives were released by the Public Audit Committee.
They said that McColl initially set out a “positive” vision for the company after he bought it from administration in 2014.
However, the workers said the contract for the two ferries led to the “demise” of the shipyard, saying inexperienced managers were brought in who reconfigured the yard in an inadequate way.
The meeting note said: “The events at the shipyard since the contracts were awarded to Ferguson Marine had led to the spirit of the yard being ‘broken’ and that it had ‘destroyed our shipyard.'”
Changes in the layout of the yard meant that unloading lorries took up to eight hours, where previously it had taken 20 minutes.
The workers said a machine was bought for £380,000 which later turned out to be unfit for purpose.
The meeting note continues: “It was commented that staff “could see the money getting wasted”, adding: “On one occasion, it was explained that an item of scrap worth approximately £5k which belonged to Caledonian Maritime Assets Limited had been identified.”
The workers said the new managers took an approach of “knock everything down” in order to construct new buildings.
Staff also claimed managers were motivated by bonus payments, leading to the wrong work being prioritised.
The committee heard: “On one occasion, a funnel was built without any pipes, allowing some managers to receive a bonus, however, the work later had to be redone.”
The workers said a “culture of managers” continued under Tim Hair, the turnaround director brought in when the yard was nationalised in 2019.
Reflecting on the current chief executive David Tydeman they said he “talks sense”.
They raised concerns that there may be further cost increases for the two vessels, and that they may not be fit for purpose when they are launched.
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