BiFab goes into administration

Engineering firm BiFab has gone into administration after failing to secure any new contracts and a decision by Scottish ministers against nationalising the company.

In order to save BiFab from closure in 2017, and to support the delivery of SSE’s Beatrice Offshore Wind project, the Scottish Government invested £37.4 million through a combination of equity and loan facilities and converted this to a 32.4% equity stake in BiFab.

A loan facility of £15m has also been provided to support working capital.

Despite this, the company announced that the board had agreed to place the company in administration following the Scottish Government’s decision to remove contract assurances.

BiFab said it had worked “tirelessly” to bring jobs into Fife and lewis with “some success”.

It said: “However, the absence of supply chain protections in Scotland and the wider UK have consistently undermined our ability to compete with government-owned and government-supported yards outside and inside the European Union.

“We would urge the Scottish and UK governments to address these structural challenges as a matter of urgency in order to ensure that the benefits of offshore renewables are shared more widely with communities across the country.”

Economy secretary Fiona Hyslop, said that the Scottish Government would do “everything in its power” to support the BiFab workers in this “extremely worrying time”.

She said: “The skills and dedication of the workforce is recognised throughout the renewables and offshore industry and will play an important role in our future energy ambitions.

“The Scottish Government has been working for more than three years to support BiFab through the financial difficulties it has faced and remains committed to securing a future for the yards and the workforce.

“As a minority shareholder, we have been exhaustive in our consideration of the options available to us to support BiFab. There is no legal route for either the Scottish Government or the UK Government to provide further financial support to the company as things stand.”

She added: “In order to successfully secure and deliver new contracts, BiFab required working capital, the provision of appropriate assurance packages by the shareholders, and plans for investment at the sites. Despite commitments made at the time of acquisition, this is something the majority shareholder JV Driver was not willing to provide to secure future work.

“We will now work with the administrators and trade unions to secure a new future for the BiFab yards in Fife and the Western Isles, helping ensure they are able to diversify and compete in this competitive market.

“We have also committed to establish a joint working group with the UK Government to explore how existing policy measures can be used to strengthen the renewables and clean energy supply chain in Scotland. We continue to call on the UK Government to take more radical action to ensure that local renewables developments move away from a focus solely on price and better support the domestic supply chain.”

Unions said the lack of further financial support had left “industrial ruins” in Fife and Lewis.

In a joint statement, GMB Scotland and Unite Scotland said: “BiFab’s administration exposes the myth of Scotland’s renewables revolution as well as a decade of political hypocrisy and failure, in Scotland and the rest of the UK.

“The workers and communities dependent on these yards have fought so hard for a future and everyone was hoping that 2021 would finally be the turning point.

“Shamefully the Scottish Government has buried these hopes just in time for Christmas and they have worked together with UK Government in doing so.

“A decade on from the promise of a ‘Saudi Arabia of renewables’ and 28,000 full time jobs in offshore wind manufacturing, we’ve been left with industrial ruins in Fife and Lewis.”

STUC general secretary Roz Foyer said: “Today’s announcement is the latest stage in a sorry saga of government and corporate failure with the victims being workers and their families from Fife to the Islands. These failures began over a decade ago with false promises of Scotland becoming ‘The Saudi Arabia of Renewables’ without an investment and industrial strategy to match.

“No statement of commitment to move forward and create clean energy and renewables supply chain jobs will be believed unless government and big business accept their previous failings. The current mistrust goes to the heart of workers’ faith in a Just Transition and without a Just Transition the whole journey towards net zero is at risk.

“Despite plans for billions of pounds of offshore wind investment, manufacture and construction, major elements of future projects including jacket construction currently appear destined for low cost labour countries in the East and/or state supported European competitors.

“We do not intend to give up. While there is the faintest hope to bring immediate work to the yards, we will fight for it.  And whatever happens on the NNG contract we will be pushing governments north and south of the border to bring forward an urgent plan for jobs driven by an overhaul or procurement policy and step change in investment.”

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