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BiFab claims Scottish Government ‘untruthful’ over financial claims in ‘growing scandal’

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Accusations of untruthfulness and inaccuracy have been made against the Scottish Government over allegations a lack of financial support from BiFab’s Canadian owner is to blame for the company’s problems.

Last month a £2 billion deal collapsed 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.

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READ MORE: ‘No legal route’ to bail out BiFab, say UK and Scottish Governments

On Tuesday, Scotland’s Economy Secretary Fiona Hyslop said 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.

But in a statement published today, 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.

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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.

READ MORE: Unions attack ‘lack of accountability’ over ministers’ failure to explain BiFab U-turn

“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.

And 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, according to BiFab.

The company said ultimately it appears the NnG project will be lost to BiFab along with the 400 to 500 jobs it promised to create.

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It stated: “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 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.”

Scottish Greens energy spokesperson and Fife MSP Mark Ruskell said: “The Scottish Government cannot bemoan the fact that it’s a minority shareholder with no seat on the board while at the same time turning down opportunities to step up and become a majority shareholder.

“Bifab urgently needs a recovery plan that can secure interim work and deliver promised green jobs while the Scottish Government works towards state ownership that is still in line with market rules it has to adhere to.”

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The Scottish and UK Governments have been contacted for comment.

 

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