BiFab faces uncertainty after contract negotiations collapse
The future of Burntisland
and its three yards is unclear following
the collapse of negotiations between BiFab and EDF for the manufacture
of foundations for the Neart
offshore wind project.
Bifab was negotiating a contract for the manufacture of eight turbine foundations
for the project. Issues reportedly stemmed from the Scottish Government's
decision to not provide 'financial guarantees' for the work.
The Scottish Government previously provided support to BiFab back in
2017. This included an investment of £37.4 million through a combination
of equity and loan facilities – this was converted to a 32.4% equity stake
in BiFab. It also provided a £15 million loan facility to support working
government maintains that without majority shareholders
investment, it cannot provide support under state aid restrictions.
The secretaries of Unite Scotland and GMB Scotland launched criticism Scottish
Government over the collapse of the deal. GMB Scotland Secretary Gary Smith
and Unite Scotland Secretary Pat Rafferty said: “It looks like the
Scottish Government Ministers have walked away from our best chance of
building a meaningful offshore wind manufacturing sector, and in doing
so has extinguished the hopes of communities in Fife and Lewis who were
banking their future prosperity on it".
“It’s a scandalous end to a decade which started with promises of a “Saudi
Arabia of Renewables” supporting 28,000 full-time jobs in offshore wind
and now finishes in mothballed fabrication yards and no prospect of any
contracts or jobs on the horizon.
“Both the First Minister and the Prime Minister promised a green jobs
revolution but they didn’t tell anyone it would be exported, and it all
amounts to broken promises to workers who needed these yards to be thriving
instead of dying.
“The fabrication contracts for NnG, just like those on the Seagreen project,
will be manufactured by the rest of the world. Two projects worth a total
of £5 billion, requiring 168 turbine jackets to power our future, and not
even one will be built in Scotland – everyone needs to let that sink in.
“This is what political failure looks like and people are right to be
Last month GMB London called for a halt on new offshore wind farms until
a local supply chain, as is the case for nuclear, is in place. This followed
criticism from GMB Scotland of foundation contracts being issued to fabrication
yards outside Scotland for the Seagreen offshore wind farm.
BiFab's operations cover three yards in Arnish, Methil and Burntisland.
Troubles started for the yards in 2017, with the threat of closure looming
as a result of cash flow problems. This stemmed from a dispute over payments
between regarding a contract for the manufacture of jacket foundations
for the Beatrice
offshore wind farm.
The company received a financial package to temporarily lift the threat
of administration and allow it to complete its contract for the £2.6bn
offshore wind farm project. The financial support saw BiFab receive payments
to alleviate immediate cash flow issues enabling the threat of administration
to be lifted and ensuring the full funding of the Beatrice contract.
It was then bought by Canadian company JV Driver, through its subsidiary
DF Barnes, in 2018. It was purchased as part of an agreement brokered by
the Scottish government to support new opportunities at these yards for
fabrication and construction in the marine, renewables and energy sector.