Infrastra PLC have taken over two of the three Bi-fab facilities (12th February 2021). The two rescued are Arnish (Western Isles) and Methil (Fife). Infrastra currently operate Harland and Wolfe (Belfast) and the Bifab yards will now operate under this brand.
Some press attention focussed on the fact that the 12 year lease was acquired for about 800k, and this was contrasted with the £50m plus spent by the Scottish Government prior to Bifab’s collapse. Maybe that’s why the Scottish Government were not trumpeting this development as a “great thing?” Maybe, but there are other reasons, after all when it comes to business and ideas we are quite confident that the Scottish Government have no capability nor interest in business and economics. The real trouble for the SNP is that to make Bifab into a business, two key things are needed:
- Availability of Markets and a long term strategy
- Tearing up the E.U. Procurement directives
With respect to markets and strategy, the new company has it’s eye on two key areas, namely the offshore wind farms in the North Sea (and some in Irish Sea). As, within a very few years, most planned capacity will be in “English waters”, it is necessary to take a UK wide perspective. On the same theme, as the Infrastra press release noted there is “a shortage of UK shipbuilding and heavy fabrication” capacity. Well, who knew that with the UK out the E.U., the UK being surrounded by water there was an opportunity to expand our shipbuilding industry? This is obvious to even those that couldn’t find a coconut on Coconut island, even the Scottish Government, however it is a post Brexit UK play, and these sort of initiatives rarely generates enthusiasm in Edinburgh.
The last one – E.U. Procurement directives – is of course the most important political concern for the Scottish Government. As I have written elsewhere this is potentially the most powerful tool returned to the UK arising from Brexit. The Edinburgh Government are desperate to avoid talk about this, because to use this power means a real divergence from the E.U. which, politically, they are desperate to avoid – even if it costs Scottish jobs.
Already, a senior executive in Infrastra stated that the Scottish Government should change procurement rules to support “local content”. This idea was supported by a careless twitter from a prominent SNP personality who will find that when she goes to Edinburgh with this idea it will gain very little traction. Nevertheless, it is a key area which needs to be pushed – I noted an article from a former Scottish Minister regarding procurement in a national paper last week.
At this point I should add that tariffs and local preference/protection is not always a good long term idea. Free trade and “competitive advantage” is a key driver of wealth creation and lifting people out of poverty in the global economy. In the case of wind power, that is why turbines are made (mostly) in Germany and Holland. When in the E.U. there was no way to establish any significant presence in the high value part of the wind industry. However, energy and shipbuilding have a strategic element and are long term industries, even more so given the unstable nature of the world at the moment. These industries have been on their knees for ages and it is simply not credible that the UK (an island) has no strategic presence. Many countries have built up their presence in key strategic industries in the past with short-term protection.
Anyway, let’s see how this goes. Whatever happens it’s better than spending £50m and then liquidating. Let’s forget the politics and Make Scotland Better. Only 29 jobs have been secured at the moment but that’s a start and far better than keeping to a party line and keeping engineering workers unemployed.
Make Scotland Better 