Meeting of the Parliament (Hybrid) 02 December 2020
I welcome the opportunity to contribute to today’s debate on BiFab. I know that this will be a worrying time for BiFab’s workers, and we continue to do everything in our power to support them.
The Scottish Government support for BiFab has been significant in that £37.4 million was converted to a 32.4 per cent equity stake, which is the financial support that Alex Rowley referred to, and a loan facility of up to £15 million was provided. The Scottish Government has provided 100 per cent of the working capital for the business.
One of the main questions that has been asked of me is why the Scottish Government was able to support the company in late 2019 but cannot do so now. It is important to note that BiFab had a strong pipeline of work opportunities at the start of 2020, with the potential to secure the NnG and Seagreen contracts. The combined delays to the NnG contract award as a result of the pandemic, SSE’s decision to award the Seagreen contract to companies in China and the middle east, compounded by JV Driver’s continued lack of financial support for the business, greatly weakened BiFab’s cash flow and balance sheet to the point at which we could no longer lawfully support the company financially.
It is a wing and a prayer to think that somehow the state aid problem will be solved in January. There will be a solution, but we have no idea what it will be. It must be understood that the Scotland Act 1998 specifically gives the Scottish ministers responsibilities that ministers in other places do not have. [Interruption.] I want to develop my point.
I have considered all legal options for continuing to financially support BiFab. My conclusion that the Scottish Government can no longer continue to support the business is based on a range of facts, including the current position of the business, its trading forecast, its prospects for future work, and the continued no-risk position of the majority shareholder. We have explored a range of alternatives, including state ownership, but have concluded that there is no legally compliant way for us to do that.