Fife engineering firm BiFab has gone into administration following the Scottish Government’s withdrawal of financial support.
The future of Burnitisland Fabrications has been in doubt since the Government last month withdraw financial guarantees supporting the manufacturing of eight offshore wind turbine jackets for the Neart na Gaoithe (NnG) project.
The NnG work would have brought more than 200 workers back to the company’s yards in Methil and Burntisland.
The Scottish Government previously bailed BiFab out in 2017 and remained a minority shareholder after the company’s purchase by Canadian firm JV Driver through its subsidiary DF Barnes.
In total the company received £52m from the Scottish Government.
Economy secretary Fiona Hyslop told MSPs on Wednesday that ministers had ruled out nationalising the struggling firm and they “can no longer lawfully support the company financially”.
Company statement
A statement from the company today said: “BiFab can confirm that the board has agreed to place the company in administration following the Scottish Government’s decision to remove contract assurances.
“The company has worked tirelessly to bring jobs into Fife and Lewis with some success.
“However, the absence of supply chain protections in Scotland and the wider UK have consistently undermined our ability to compete with Government owned and Government supported yards outside and inside the European Union.
“We would urge the Scottish and UK Governments to address these structural challenges as a matter of urgency in order to ensure that the benefits of offshore renewables are shared more widely with communities across the country.”
Industrial ruins
Responding to the announcement in a joint statement, the trade union secretaries from GMB Scotland and Unite Scotland, Gary Smith and Pat Rafferty, said: “BiFab’s administration exposes the myth of Scotland’s renewables revolution as well as a decade of political hypocrisy and failure, in Scotland and the rest of the UK.
“The workers and communities dependent on these yards have fought so hard for a future and everyone was hoping that 2021 would finally be the turning point.
“Shamefully the Scottish Government has buried these hopes just in time for Christmas and they have worked together with UK Government in doing so.
“A decade on from the promise of a ‘Saudi Arabia of renewables’ and 28,000 full time jobs in offshore wind manufacturing, we’ve been left with industrial ruins in Fife and Lewis.”
No legal route for more support
In a statement today Ms Hyslop said: “I know this will be an extremely worrying time for BiFab’s workers and we will continue to do everything in our power to support them and stand ready to work with any company interesting in taking on the yards.
“The skills and dedication of the workforce is recognised throughout the renewables and offshore industry and will play an important role in our future energy ambitions.
“The Scottish Government has been working for more than three years to support BiFab through the financial difficulties it has faced and remains committed to securing a future for the yards and the workforce.
“As a minority shareholder, we have been exhaustive in our consideration of the options available to us to support BiFab.
“There is no legal route for either the Scottish Government or the UK Government to provide further financial support to the company as things stand.
“In order to successfully secure and deliver new contracts, BiFab required working capital, the provision of appropriate assurance packages by the shareholders, and plans for investment at the sites.
“Despite commitments made at the time of acquisition, this is something the majority shareholder JV Driver was not willing to provide to secure future work.
“We will now work with the administrators and trade unions to secure a new future for the BiFab yards in Fife and the Western Isles, helping ensure they are able to diversify and compete in this competitive market.
“We have also committed to establish a joint working group with the UK Government to explore how existing policy measures can be used to strengthen the renewables and clean energy supply chain in Scotland.
“We continue to call on the UK Government to take more radical action to ensure that local renewables developments move away from a focus solely on price and better support the domestic supply chain.”
Slow demise of once proud company
BiFab previously had to be rescued by the Scottish Government in 2017 when “critical cash problems” emerged.
At the time, the company was part way through contracts to produce 26 subsea turbine jackets for the Beatrice Offshore Windfarm and had a workforce of around 1,400 – 251 permanent staff and 1,132 employed via agencies.
It led to workers marching to the Scottish Parliament in a Battle for BiFab as it sought Government support.
But even after the company was saved from the clutches of the administrators three years ago it failed to secure any major contracts.
Its Canadian owners were accused of a lack of investment in its mothballed yards which had led to the company being unable to compete.
All hopes rested on the work for the NnG wind farm which would have brought hundreds of workers back.
This spectacularly collapsed when it emerged last month that ministers could no longer provide the necessary financial support.
BiFab was also overlooked for work on the Seagreen offshore wind project in September.
With no other work on its books and neither its Canadian owners or the Government willing to provide more funding, administration was inevitable.
