SCOTTISH ministers admitted they would land the taxpayer with a compensation bill running into six figures by cancelling a multimillion-pound shipping contract, it was claimed last night.
The furious war of words over the move to deny a Devon firm a £10m contract to build a fisheries protection vessel escalated further as an English MP said environment minister Ross Finnie had acknowledged the move would spark compensation demands "of
tens of thousands of pounds".
The Scottish Executive last night insisted it had no record of Finnie making such a suggestion during the fierce bidding war over who should win the deal to build the new vessel for the Scottish Fisheries Protection Agency (SFPA).
But that was contradicted by Geoffrey Cox, local MP for the English firm Appledore, which had been awarded the contract by the SFPA before Finnie ordered a review.
As first revealed in Scotland on Sunday last week, the matter has raised eyebrows because one of the firms which Appledore beat, Ferguson's shipyard in Port Glasgow, is based within Finnie's constituency. It has also emerged that Finnie is a friend of the yard's chief executive.
Cox has now written to Scotland's Auditor-General demanding an inquiry into the decision. In a detailed account of a meeting with Finnie and Appledore owners, the MP claimed that he warned the minister that aborting the competitive tendering exercise and handing the deal to Ferguson would open up the Executive to demands for compensation.
He added: "The minister told all those present that he had realised that the [SFPA] might have to pay such claims when taking the decision to cancel the procurement. I am aware that the costs of Appledore Shipyard alone run to many tens of thousands of pounds. Therefore, at the least, it seems inevitable, if those claims are pressed by the three tenderers, that a very substantial amount of public money will have to be paid out in compensation."
The Executive has insisted that it brought in an independent firm of lawyers to examine the case and that they concluded Finnie acted correctly.
The full article contains 380 words and appears in Scotland On Sunday newspaper.
