Moray and Kincardine Offshore Wind Projects go to Spanish and Belgian Yards

Despite recent talk of a Just Transition process major contract work for offshore renewables appears to be at risk of bypassing the yards at Burntisland and Methil in Fife with big contracts going instead to Spanish and Belgian companies.

BiFab trade unions GMB and Unite have today warned that the prospect of no work coming to Fife from two major Scottish offshore renewables projects would be ‘an absolute scandal’.

The Moray East and Kincardine offshore wind farm projects have a total value of around £2.8 billion and BiFab’s new Canadian owners DF Barnes have been actively pursuing contracts from both. But the fabrication work for five platforms supporting the Kincardine project have been awarded by procurement firm Cobra Wind International to the Spanish state shipbuilders Nevantia and the Moray East project procurement firm GeoSea DEME has awarded contracts for one hundred turbine jackets to UAE fabricators Lamprell and Belgian steel constructors Smulders.

GMB and Unite understand that DF Barnes remain in negotiations to secure a portion of the fabrications work from the contracts allocated to both Smulders and Nevantia.

In a joint statement, GMB Scotland Secretary Gary Smith and Unite Scotland Secretary Pat Rafferty said:

“There is a real possibility the yards in Fife could end up with nothing from the Moray East and Kincardine projects, which would be an absolute scandal.”

“We believe DF Barnes and the Scottish Government are fighting hard to secure contracts but they are trying to negotiate their way through a spaghetti bowl of vested interest groups with established supply chains of preference.”

“The truth is that state funded European energy and engineering firms, backed by Far East finance and Middle East sovereign wealth funds, are carving-up thousands of jobs and billions of pounds from our renewables sector.”

“To working class communities in Burntisland and Methil this doesn’t look anything like a just transition or a green jobs revolution – it looks like a future that’s heavily rigged against their hopes for employment and prosperity.”

“The immediate challenge for everyone is to try and break this international stranglehold on the Scottish renewables sector and get work and investment flowing into the Fife yards.”

Scottish renewables is a huge success in terms of technology, investment and output, but it remains an elusive aim to create joined-up policy so that substantial works gets allocated to the Scottish-based yards.

Comments (15)

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  1. Mark Bevis says:

    It was only be a matter of time before the corporations worked out a way of taking over renewable energy projects. Because it has to be done at scale to be effective in a market economy, this is the sort of things that will happen.

    “…state funded European energy and engineering firms, backed by Far East finance and Middle East sovereign wealth funds…” are symptoms of the bigger problem of wealth inequality, nearly all raised on the back of fossil fuel extraction. When governance cannot determine the fate of a nation’s own workers, what point nationalism?

    Perhaps we should have countries called Exxon Mobile, Bayer, Nestle, Amazon, Facebook, Apple, Chevron, etc, and whichever corporation owned the company you worked for is your nationality……

    In an equitable market the people of Scotland should be able to finance the projects in their own land and have control over who does what.
    In the current neo-liberal market, the profit margin dictates all. 🙁

    1. Willie says:

      Not all that dissimilar to giving the Indians of America glass baubles. Or is it worse, not even bothering to give them baubles at all.

      Ah well that’s what Jock voted for if I may cynically opine. What importance do the new liberal corporates attach to the fodder in BiFab and other such companies looking to earn a day’s pay.

      Nothing do I hear you say. Yes that’s right. They don’t deserve the work. No work for them. Just the way it is, and whilst folks may complain, do folks actually do anything about it.

      Course they don’t. Scotland, finest, proudest nation on the planet.

      And to conclude, sorry for the vitriol, but it makes you feel like that.

  2. Gordon McShean says:

    I feel pain in reading about Fike

  3. JohnG says:

    We are in real danger of losing out on so many job opportunities. Same happening in new Scottish space industry.

    Lockheed Martin securing UK funding to build a new spaceport. Some Danish/German company building the launch vehicle. Spanish company the navigation/tracking system.

  4. Jamsie says:

    Maybe it has something to do with previous performance?
    If the Scottish “government” are prepared to bankroll a Canadian company at the expense of the taxpayer is it really any different to what others are doing?

    1. David Allan says:

      Aye Jamsie just mibbee the our” Better Together” friends and partners in Westminster could provide those “Broad Shoulders” and pitch in !

      WE are for the moment still part of the UK !

      A stark demonstration of why the existing devolution settlement as part of the mighty UK ain’t enough!

      1. Jamsie says:

        David
        I suggest you go some research into the Bifab scandal. Yes scandal!
        The Scottish “government” has already thrown away £35m of our money with.a further £10m to be drawn down in a loan.
        The £35m was converted to share capital which is now notionally based on the latest accounts from BiFab at £1.
        The conversion to share capital enabled it to be used to pay off debts ran up by the company whose competence and viability were already in question with no real potential for return to the taxpayer.
        The new Canadian owners would not have contemplated the takeover without the debts of the company being paid off and being offered the further £10m loan to enable them to draw down as bid costs are accumulated.
        The £35m did not save any jobs!
        Meanwhile over at FMEL??!!

        1. Jamsie says:

          And SSE have written down the value of their shareholding in the company from £16.5m to £1.
          The taxpayer will also of course reimburse SSE for the tax credit on these shares so the loss overall to the taxpayer in the UK will be a further £4.125m.
          The SNP ministers have broken the law by failing to respond to FOI requests and have tried to cite conditions which are not covered by the act.
          The will now be investigated at taxpayers further expense.
          The directors of BiFab all walk away with no penalty on trading up such losses.
          And I repeat no jobs were saved!
          Now remind me why we should support a loss making business such as this?
          Or FMEL?
          I can think of a number of better investments for taxpayer monies and which would of course be subject to better governance.
          This will not be buried!

          1. David Allan says:

            Jamsie

            My earlier point remains entirely relevant –

            Quoted from Mike’s article –

            “Scottish renewables is a huge success in terms of technology, investment and output, but it remains an elusive aim to create joined-up policy so that substantial works gets allocated to the Scottish-based yards”.

            Just why is that ?

            What evidence of any UK Government assistance ? focus on providing evidence on how exactly the UK helps Scotland in this situation , we have the yards the skills yet no tangible benefit from being part of the UK in terms of securing work.

            Better Together – No – It’s still not working!

          2. Jamsie says:

            David
            You seem to miss the point.
            Mr Ed’s question is one for the Scottish “government” is it not?
            The success in renewables which he refers to is still questionable as a.) the energy from renewables is largely weather dependant i.e hydro or wind and b.) more than 90% of our renewable energy is produced by companies owned by who benefit from surcharge paid for by the consumer to promote this.
            It does not provide security of supply not is it cheap.
            As to the statement “we have the yards” well we don’t actually. These yards are now in Canadian hands. And as for the skills a large proportion of the BiFab workforce travelled from the North East of England. The type of work involved peaks and troughs in order books which BiFab dealt with by employing agencies to staff and the workforce do acruing no longer term benefits either to the workforce. The cost of employing labour in this manner is obviously not economic when tendering in a competitive market.
            But what I find most strange is why you would expect the U.K. to do something to endure these yards got a share of work when enterprise is a devolved matter.
            The problem is that neither the UK nor the Scottish administration can influence where contracts are placed without beaching state aid ruleslaid down by the EU. And it maybe the SNP are guilty of something much worse here.
            But in case you hadn’t understood thus is a company who lost £50m plus over a very short period. The business model is not sustainable without subsidy in it’s current form. Costs are too high and they are unable to compete in the market place to win tenders.
            So the UK government just gave the Scottish “government” an extra £1bn to spend on the NHS given the wasted £45m to date would you advocate state subsidy for this business to continue making losses?
            Incidentally I suspect the directors took their fair share when the “loan” was secured. Is that a good example to set when you are chafing business?

        2. David Allan says:

          Trade and Industry remain reserved . AS do the ‘ levers’ that pertain to same .

          Where does Westminster manifest it’s help in the context of this situation ?

          Need get Chris Grayling on the job !

          1. Jamsie says:

            David
            Perhaps wee Nicola’s “friends” in the EU will jump in?
            Don’t hold your breath.
            Suggest you check the brief for Trade and Industry.
            You are obviously confused.
            Anyway given their track record in the last contract it will be difficult for them to get any of the larger contracts on the go currently.
            The existing supply chains have a track record of delivering on time cheaper.
            If as Mr Ed suggests they money invested is coming from the far and Middle East then there is not much to be done.
            If investors here don’t have the confidence to back projects like this then opportunity obviously goes begging.
            What about FMEL and the billionaire in charge there?
            Why won’t he get involved?
            Or has he been told the £100m he has been given us all that can be done?
            Even then he is not satisfied and had launched a legal claim against CMAL for £50m.
            More taxpayers money down the river as it were!

          2. Jamsie says:

            David
            Why do you avoid the issues?
            Don’t you know that is why the no vote is so solid?
            The Scottish “government” already stepped in to save the day with millions.
            Result?
            All jobs lost and the taxpayer out of pocket.
            If you are saying that the U.K. government should step in because the Scottish “government” failed abysmally what does that say.
            Worse if you are saying that the Scottish “government” have strayed into U.K. government territory and failed have they just wasted taxpayers money trying to pull off a political stunt.
            Maybe the SNP should be forced to make good the taxpayer’s losses?
            You argument that the Union should step in and save a lossmsking business does not stack up but like most Indy policies people like you are blind to the effect.
            No is the answer.
            When the question is answered if it ever gets asked the matter will be closed forever.
            Can’t come soon enough for me.
            The conference will be here soon enough and the platitudes restated daily.
            But will she call a referendum?
            I think you already know the answer.

  5. Marga says:

    EU state aid rules? At least in Spain, the taxpayer acts as surety when bidding for big foreign projects (notorious example Panama Canal and I believe high speed train to Mecca). Underbidding is the norm, with any financial slack covered contractually with taxpayers’ money. Mainly applies to the Ibex35 companies which benefit from government contracts. The immense Spanish high speed rail network was a godsend to constructors during the crisis years and keeps adding km.

    So if the UK is obeying EU state aid rules it may be the only EU country doing so. Clearly I’m no expert, just quote what seems common knowledge over here.

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