BiFab claims Scottish Government ‘untruthful’ over financial claims
The Scottish Government has been accused of being untruthful and inaccurate over allegations a lack of financial support from BiFab’s Canadian owner is to blame for the company’s problems.
A £2 billion deal collapsed last month for Burntisland Fabrications (BiFab) to manufacture eight wind turbine jackets at its yards in Methil, Fife, as part of the Neart Na Gaoithe (NnG) project.
The UK and Scottish Governments have said they have no legal route to provide further financial support to the company, which was acquired by Canada-based JV Driver in April 2018 after the Scottish Government rescued BiFab in 2017.
Scotland’s Economy Secretary Fiona Hyslop said on Tuesday that the main issue leading to the problems has been the “unwillingness” of parent company and majority shareholder JV Driver to provide working capital, investment or guarantees for BiFab.
In a statement on Friday, BiFab said: “Scottish ministers continue to focus on JV Driver’s alleged lack of investment, guarantees and capital as the primary cause for its current situation.
“This cannot be further from the truth.”
BiFab said that, recognising the growing state aid challenges faced by Scottish ministers early in 2020, JV Driver offered on numerous occasions to transfer some or all of its shares in BiFab to Scottish ministers at no cost to the Scottish purse but ministers never pursued it.
The company said: “This offer was made to facilitate an ownership position by Scottish ministers that could support further investment if and when required.
“This offer was never pursued by Scottish ministers. This offer still stands today.”
The company said BiFab and its management were given no access or opportunity to address the BiFab Working Group set up by the UK and Scottish Governments and have not been contacted by it.
BiFab added: “Scottish ministers also point to the lack of a long-term business plan as a secondary causal factor to the current situation.
“Again, this is inaccurate. JV Driver prepared a long-form multi-phase business plan for Scottish ministers prior to acquiring BiFab.”
BiFab said many nations have local supply chain protections that limit the amount of international sourcing available to major energy infrastructure projects but that no such legislation exists in Scotland or the wider UK.
It said that as a result, thousands of high-paying fabrication jobs are being lost to the Middle East and Asia and only Scottish and UK ministers have the ability to change this policy.
BiFab said ultimately it appears the NnG project will be lost to BiFab along with the 400 to 500 jobs it promised to create.
It said: “As a result of recent correspondence from Scottish ministers, it is apparent that creditor support from the Scottish ministers required to pursue critical solutions for BiFab will be unavailable.
“While incredibly disappointed, BiFab management continues to consider all options available to the business.”
The jobs of the future will continue to be exported to the rest of world and subsidised by the billpayer to the tune of billions
The Scottish secretaries of the GMB and Unite unions, Gary Smith and Pat Rafferty, described the situation as a “growing scandal”.
They added: “The signal this sends out to the renewables industry is clear, it’s business as usual.
“The jobs of the future will continue to be exported to the rest of world and subsidised by the billpayer to the tune of billions.
“At best, Britain will get scraps off the table from its own offshore wind market but it looks like both Governments have buried any credible hopes for a meaningful green jobs recovery in Scotland.”
A Scottish Government spokesman said: “The Economy Secretary was clear when she set out to Parliament earlier this month that state aid rules make intervention impossible – a view shared by UK ministers – and we collectively remain bound by the rules.
“The situation at BiFab is a culmination of a number of issues, the main one being the unwillingness of the parent company and majority shareholder JV Driver to provide the working capital investment or guarantees for the company.
“As a minority shareholder, we have been exhaustive in our consideration of the options available to us to financially support BiFab.
“We have worked collaboratively with the UK Government to explore all options and we have not identified a legally compliant way to support the business.”
The UK Government did not wish to comment.