Ms Sturgeon repeatedly defended her Government’s decision to award a deal for two CalMac ferries to Ferguson Marine in 2015, saying it saved the yard and jobs.
However she also expressed her “deep regret” that the contract had gone disastrously wrong, with the vessels currently five years late and double the original budget.
She said she would not award the contract in the same way again.
Ministers agreed to go ahead without a standard refund guarantee from the Port Glasgow yard which would have protected the public purse.
The Government pressed ahead against the advice of its own ferry procurement arm, Caledonian Maritime Assets Limited (CMAL).
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| Glen Sannox (Hull 801) is one two ships that have been severely delayed |
When the Government struck the deal, the ferries were supposed to cost £97m, but the latest official estimate is £240m, with some outside experts forecasting far more.
The yard's new CEO has also warned major items, such as engines, generators and switchboards, had yet to be tested and could throw up further problems and costs.
“Our focus now is on ensuring these ferries are completed in the interest of our island communities and also on ensuring that Ferguson shipyard, and all those who work in it, have a bright future. We will learn lessons from this - I’ve said several times today I deeply regret the experience of this.”
Asked if she now considered it had been a “bad deal”, Ms Sturgeon said: “Obviously, we would not repeat what has happened - I think that is self-evident.”
Scottish Tory leader Douglas Ross reminded the First Minister she called the yard “iconic” when the deal was done.
He said she had helped it become “iconic, but for all the wrong reasons”.
Ms Sturgeon said: “I still believe the Scottish Government was right to do everything to save Ferguson’s shipyard. But for those decisions, Ferguson’s shipyard would not still be employing significant numbers of people as it is today.
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“Douglas Ross may well take different views on this, but I do think it was right for the Scottish Government to protect and save jobs and protect that shipyard.”
Scottish Labour leader Anas Sarwar confronted Ms Sturgeon with emails released under freedom of information about the appointment of a troubleshooter at the yard.
Tim Hair was hired as “turnaround director” on the eve of Ferguson Marine being nationalised in August 2019, after problems with the ferry contract led to it going bust.
He said: “Emails obtained through freedom of information show that appointment was rushed through without the usual competition in just a few days.
“Mr Hair was selected from a shortlist of only three people, all recommended by corporate advisers PricewaterhouseCoopers.
“In the process of negotiating his salary, he started by offering a rate of £2,000 a day but ended up being paid just under £3,000 and expenses per day.
Mr Hair ended up earning £2m under a rolling contract after staying in place until the start of 2022, when David Tydeman came in as a new CEO.
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Mr Ross said later: “ The First Minister is somehow trying to claim her government were right to sign this deal - while accepting she wouldn’t agree to it again.
“She is in denial about how badly wrong her government got this contract.
“Nicola Sturgeon signed a contract against the advice of experts.
“She started building ferries without agreeing a final design.
“She threw good money after bad and has run up a £250 million bill. Worst of all, she removed the essential safeguard that would have protected Scottish taxpayers.
“The public is going to be left picking up the tab for Nicola Sturgeon’s mistakes - and we don’t even know how big that bill will eventually become.
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“Nicola Sturgeon refused to guarantee that costs will stay below £350 million. The final bill here could still spiral out of control further.
“The Deputy First Minister John Swinney said in 2014 that the SNP would replace 12 ferries for £250 million. They haven’t even built one for that.
“The deal that the First Minister is so proud of has become a disaster and a sign of this government’s incompetence.
“The only lesson this government seems to have learned is how to send ferry contracts abroad to Turkey and Romania.”
The ferry destined to serve the Isle of Arran will be delayed even further after a “blunder” with internal cabling was discovered.
Both Glen Sannox (Hull 801) and Hull 802, being built at the nationalised Ferguson Marine shipyard in Port Glasgow, rely on a “complex network” of more than 9800 cables.
But in the week before Christmas 2021, engineers unwound coils that had been installed in late 2018/early 2019 and found some of them were too short to reach the necessary equipment.
After three weeks of investigation, Ferguson engineers believe that at least 400 cables will need to be addressed, with the worst case requiring 939 cables to be replaced.
Most or all the “Legacy Cables” will need to be cut out and the process started again. The Scottish Government said it was a “very disappointing” and “unforeseen legacy issue”.
In a letter, Ferguson Marine’s turnaround director Tim Hair said it was not currently possible to determine the impact on schedule and cost of the problem.
Scottish Conservative shadow transport minister Graham Simpson MSP said: “Glen Sannox is already years late, and this blunder will leave people wondering if it will ever go into service.
“The ship was meant to support one of CalMac’s busiest crossing routes between Ardrossan to Brodick but this further hold-up means passengers will have to make do even longer with ageing and increasingly-unreliable ferries.”
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The faulty cables were installed by a sub-contractor before the shipyard went into administration – none of the cables were installed after the Scottish Government took control of the yard.
At the end of 2021 Mr Hair wrote to MSP Dean Lockhart convenor of the Net Zero Committee: “I regret to advise you that a problem has recently emerged with the build of 801 which I thought I should immediately bring to your attention.
“Commissioning and further cable installation cannot take place until the legacy cables are corrected, delaying the overall project to deliver 801. There will inevitably be knock-on effects that will delay the schedule for 802.
“At present it is not possible to determine the impact on schedule and cost.”
The Government owned business is left with the timetable for the two lifeline ferries running over four years late at a cost of more than double the agreed £97m “fixed price”.
