BBC Scotland, largely to advertise their own product, the often pathetic Disclosure Scotland, have recycled this old one:
CMAL may have broken its own rules by allowing Ferguson to go ahead with its bid despite being unable to provide evidence of a builders refund guarantee, a mandatory financial safeguard.https://www.bbc.co.uk/news/uk-scotland-glasgow-west-62986757
I looked at this in May 2022:
The Ferry ‘scandal’ story runs on typically ill-informed. The Herald May 26 headlined supposed neglect in securing a contract refund guarantee or pledge as they put it.
US corporate law firm Haynes Boone reveal the often worthless nature of these:
The buyer’s position is made worse by the fact that many shipbuilding contracts provide that, where the buyer terminates the shipbuilding contract for delay, the buyer is entitled to a refund of the pre-delivery instalments of the contract price, plus interest, but the yard has no further
liability to the buyer. In circumstances where, after cancellation of the shipbuilding contract, the buyer will have to find another much later slot at another yard for a higher price, a refund of the pre-delivery instalments plus interest will not compensate the buyer for its losses arising out of the yard’s breach.
As explained above, in a rising market, the buyer may be very reluctant to terminate the contract, particularly if the buyer will only receive a refund of the pre-delivery instalments ofhttps://www.haynesboone.com/-/media/project/haynesboone/haynesboone/pdfs/practice-group-pdfs/shipping/hb_affinity_shipbuilding_booklet.pdf?rev=2f7369434c5941c98fe3501e061b74ac&hash=BCCA9A9CD842A5F8D039B02ACF0C8419
the contract price, plus interest. This will not compensate the buyer for the additional costs it will incur placing another order at another yard for a higher price, and the profit that the buyer will lose as a result of the very significant delay in obtaining the ship. In these circumstances, the termination right provided to the buyer may provide very limited protection in reality.
As for the delays, which BBC Scotland have wheeled out again and again, see this:
From reader Tom Hodgens in June 2022:
This is a long post about vision and ambition.
Let’s start with a BBC article by Calum Watson from 2020 which asks the question…
“Why are we building gas-powered ships?”
The article begins with
“The two new ferries still being built in Port Glasgow have been making headlines for all the wrong reasons.
Glen Sannox and “hull 802″ are the first UK-built ships capable of running off liquefied natural gas, or LNG, as well as conventional diesel.”
“Was LNG the wrong choice – or a wise decision, poorly executed?”
“What is LNG ?
If you have a gas boiler or cooker in your home, you’ll already be familiar with natural gas – which mainly consists of methane.
If you cool this gas to minus 162C it turns into a liquid occupying only 1/600th of its original volume.
This Liquefied Natural Gas (LNG) is much easier to transport and can be used as a portable fuel for ships or even trucks and cars.
But it is still a fossil fuel that produces carbon dioxide when burned.
Ending our reliance on natural gas in our homes is seen as a key climate change goal – so why are we building gas-powered ships?
Advocates of LNG argue it’s less harmful to the environment than traditional marine fuels such as oil or diesel.
LNG engine manufacturers say they produce up to 30% less carbon dioxide than diesel equivalents.
But that doesn’t take into account greenhouse emissions during extraction and transport of the gas.
The UK currently has no facilities to liquefy natural gas so LNG would have to be imported – probably from the Gulf state of Qatar.
The LNG for CalMac’s new ships first has to make an 8,000-mile journey by sea, arriving at the Isle of Grain terminal on the Kent coast.
It will then travel a further 460 miles by road tanker to Ardrossan in North Ayrshire or more than 600 miles to Uig on the Isle of Skye.
Together, the two ships would require between four and six road tanker loads of LNG a week.
There are other problems – methane, the main component of natural gas, is itself a greenhouse gas, 28 times more potent than carbon dioxide.
A small amount of this methane can pass through an engine unburned – something known as methane slip – and enter the atmosphere.
CMAL, the government-owned agency which owns the ships used by CalMac, says the latest engines minimise methane slip.
It also hopes Scotland will eventually have its own bulk LNG storage capacity, which would improve the overall carbon footprint.”
It is an excellent article. It explains the issues, why it is was done, and the challenges. But, there has been progress. In 2020, CalMac announced Scotland’s first LNG bunkering facilities will be built in Uig and Ardrossan harbours as part of multi-million pound projects. Covid restrictions will have played havoc with the timetable but with the Scotsman website recently reporting Ferguson Marine had given CalMac a delivery date for the two ferries, it means there will be LNG bunkering facilities in place at both harbours when the two ferries begin service.
There is a UK Government report, published in January 2019, called
“Maritime 2050: navigating the future
The government’s vision and ambitions for the future of the British maritime sector”
A download available.
On page 24 of 338, under a subheading – “Towards zero emission shipping”
Paragraph 43 says –
“Air pollution is a significant risk to human health in the UK, and as the volume in global trade increases, shipping may represent a growing source of GHGs (Greenhouse Gases) Regulation has historically been predominantly at the international level with important milestones in recent years the agreement of a global sulphur cap to be implemented by 2020 and the adoption in 2018 of the Initial IMO (International Maritime Organisation) strategy on reducing GHG emissions from ships by at least 50% by 2050. These and other developments are sending a strong signal to the sector of a global transition in zero emission shipping”
Paragraph 44 says
“By 2050, the UK will actively drive the transition to zero emission shipping in its waters, moving faster than competitor countries and international standards to capitalise on economic benefits and be seen as a role model in the field. Close collaboration between industry, government and different parts of the supply chain, will enable lessons to be learned from other sectors, ensuring new regulation is appropriate and helping maritime companies realise the benefits of research and investment. Ultimately this will lead to the development and swift uptake of clean technologies”
Scotland is leading the way, and the Scottish Government’s investment in Ferguson Marine, has also given the Port Glasgow based shipyard a head start in the construction of LNG ships in the UK.
A report from 2019
“LNG-powered ships to account for 60% of new orders by 2025: Korean study”