New blow for BiFab yards as offshore contract bid collapses

By Paul Homewood


 Where did all those green jobs go (Part 97):



The future of three BiFab fabrication yards in Fife and on Lewis are in even more doubt after its Canadian owners withdrew a bid for a major contract.

DF Barnes had been negotiating to build jackets for wind turbines to be installed off Fife by French firm EDF.

But the company has pulled out, citing a refusal by the Scottish government to provide financial guarantees.

The government said rules on state aid limited the amount of support it could offer.

All three fabrication yards – at Burntisland, Methil and Arnish – are currently mothballed.

The Scottish government took a stake in the Bifab yards when they were saved from permanent closure in April 2018.

But it said it was legally barred from guaranteeing contracts while the majority shareholder was not funding the company or the yards.

BiFab’s board of directors said they were "now considering the path forward for the company".

A company statement said the government’s decision meant "it can no longer provide assurances for the NnG jacket fabrication contract".

It added: "BiFab recognises that this makes an award of the contract very challenging. The company and its partners have worked extremely hard to secure this important contract."

Economy Secretary Fiona Hyslop told BBC Scotland: "The situation at BiFab is serious."

She added that as a minority shareholder the amount of funding ministers could provide had been "exhausted".

The Scottish government highlighted that it had already invested £37.4m 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," the spokesman added.

Trade unions have been highly critical of the failure to secure more renewable power engineering work for BiFab.

Work on turbine jackets was seen as the best hope for Scotland’s offshore fabrication sector.

However, contracts have repeatedly gone to overseas yards, including Spain and Indonesia.

BiFab also recently lost out on work for the Seagreen wind farm off the coast of Angus, with those jackets being constructed instead in China and the United Arab Emirates.

Overseas yards are able to build at scale and with prices far lower than BiFab can achieve. They may also gain from government subsidy.


October 22, 2020 at 04:15AM

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