After exploring all options, both the UK and Scottish Governments have concluded that there is currently no legal route to provide further financial support to Burntisland Fabrications (BiFab) in its current form.
They have agreed it is not possible to give a £30m contract guarantee to the troubled engineering firm under existing subsidy rules, with other options now being considered to secure the future of BiFab’s yards in Fife and Lewis.
The Scottish Government said that they key issue was main shareholder, Canadian firm JV Driver, refusing to provide finance, guarantees or investment.
But the company claimed its role was to manage, not finance, the projects. The business has been unable to secure contracts for offshore wind farms.
The Scottish Government has committed more than £50m to the three fabrication yards and now owns more than a third of the business.
A joint working group will be formed to consider ways to strengthen the renewables supply chain in Scotland and to secure future opportunities. In a joint statement, the governments committed to exploring options for the future of the yards and to strengthen measures to support the renewables supply chain.
Economy secretary Fiona Hyslop MSP said that the Scottish Government has been working for more than three years to support BiFab.
“We have left no stone unturned in our search for a solution to the challenges faced by the business – as a minority shareholder, we have been exhaustive in our consideration of the options available to us to financially support BiFab from public funds.”
She explained that the Scottish Government has been clear that State Aid regulations are a barrier to providing guarantees on the contract from Saipem to build foundation jackets for the Neart na Gaoithe (NnG) project.
“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 working capital, investment or guarantees for the company.”
Hyslop added: “We are determined to secure a new future for the yards in Fife and the Western Isles, we will explore options for the future of these sites and, through this new working group, work with the UK Government to strengthen the renewables and clean energy supply chain.”
In a joint statement from the GMB and Unite unions, secretaries Gary Smith and Pat Rafferty called for the Scottish government to publish its legal advice.
“The demise of Scotland’s best shot at building a manufacturing supply chain for offshore wind is down to a decade of failure from successive SNP and Tory governments,” it added.