Engineering firm BiFab ‘being held to ransom’ by contractor, says union

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An offshore engineering firm feared to be on the brink of administration is being “held to ransom” by a contractor, a union has claimed.

The 1,400-strong workforce at Burntisland Fabrications Limited (BiFab) has voted unanimously to continue working until further notice to give the company time to sort out the financial crisis even though they may not be paid, Unite said.

The company, which has yards at Burntisland and Methil in Fife and Arnish on the Isle of Lewis, says it is facing a “critical cash position” linked to ongoing contracts and has filed a notice of its intention to appoint administrators.

Unions claim they have been told that BiFab’s financial crisis is a direct result of the main Dutch-owned contractor, Seaway Heavy Lifting (SHL), not paying BiFab for contract work already completed.

Unite Scottish secretary Pat Rafferty said: “As far as we can see BiFab is being held to ransom by the main contractor. It beggars belief that 1,400 jobs are now in jeopardy over who owes how many millions of pounds to whom.

“The workers have taken a courageous stand to save these jobs. The Scottish Government must match that commitment by doing whatever it takes to safeguard the future of the yards.”

The GMB union said it understands that cash-flow problems have stemmed from a dispute over payments between BiFab and the £2.6 billion Beatrice wind farm project contractor SHL.

Last year BiFab secured a £100 million contract from SHL for the manufacture of 26 turbine jackets, GMB said.

Gary Smith, GMB Scotland secretary, said: “This is a viable workforce and these are viable yards – important strategic assets – and they stand ready and able to help deliver the future of Scottish manufacturing.

“Letting these workers and their communities go under is not an option. We’ve got to battle for BiFab.”

Mr Rafferty and Mr Smith are due to have a crisis meeting with economy secretary Keith Brown MSP at the Scottish Parliament on Wednesday.

Martin Adam, BiFab managing director, said: “We are very disappointed that we have found ourselves in the current position which has arisen as a result of a challenging situation in respect of our ongoing contracts which have been providing much-needed employment locally in Scotland.

“We are seeking a rapid solution with our key stakeholders and the Scottish Executive to our current cash-flow position and are hopeful that this can be achieved quickly to secure the future of the business and the 1,400-strong workforce.”

BiFab said it is working on two significant contracts for the under-construction Beatrice offshore wind farm in the outer Moray Firth.

One contract is nearing completion while the other is expected to run to the end of April.

Paul Wheelhouse, Holyrood’s energy minister, told the BBC that ministers are looking at all options to help support the management team at BiFab.

He said: “I want to reassure you of that point, that we will leave no stone unturned.”

An SHL spokesman said: ” SHL has been working with BiFab for many months to support them as they address their production problems and cost overruns. We have continued to pay the company on time and in line with our contract.

“We expect the shareholders of BiFab to stand behind the performance of the company. SHL has always been keen to support BiFab’s workforce but we need BiFab’s shareholders to provide it with the financial stability it requires.

“Our priority is to ensure that our client, Beatrice Offshore Wind Ltd (BOWL), has the jackets in place ready to unlock the next phase of this exciting project. We remain committed to working with all stakeholders to find a solution that delivers the Beatrice project to BOWL on schedule.”

In a statement later Mr Wheelhouse said: “This will be a distressing time for the people employed at BiFab, as well as their families and the wider communities of Burntisland, Methil and Arnish.

“The Scottish Government is continuing discussions with Scottish Enterprise and the company, and we are determined to fully explore all options to save the company and the jobs that depend on it.

“I am meeting with trade unions to reassure them that the Scottish Government will do everything possible to support the workforce.

“Discussions with key agencies and other partners are ongoing and we are doing everything we can to find a resolution to this situation.

“As always, our Partnership Action for Continuing Employment (Pace) initiative stands ready to step in if there are any redundancies.”