THE First Minister was given secret advice that the public cost of the ferry fiasco at Ferguson's is expected to soar by even further than anticipated when ministers decided to continue to go ahead with much of the project despite it not being value for money.

Despite the warning given by the secret report by consultants Teneo, ministers decided that the job must be completed at the nationalised Port shipyard.

Ministers have come under fire over secrecy over the ferries scandal - as it was confirmed it entered into ten gagging clauses with external private companies in relation to the yard.

The non-disclosure agreements (NDAs) revelation has come as ministers have been criticised for refusing to spell out the extra costings involved in continuing to complete one of the two dual-fuel vessels for CalMac, which they admit is not value for money.

A Scottish Government due diligence review supported by a secret analysis by consultants Teneo said it would be cheaper to scrap the ship still being built at Ferguson and place a new order elsewhere. It is understood the Teneo report is subject of a non-disclosure agreement.

READ MORE: Alarm as Ferguson Marine indicate new ferry fiasco delay & cost rises

Glen Sannox and her sister Glen Rosa are still not ready despite being due to be available for passengers in first half of 2018, when Ferguson Marine was under the control of tycoon Jim McColl.

With both due to serve Arran, they are almost six years late and the latest estimates suggest the capital costs of delivery could have more than quadrupled from the original £97m.

The wellbeing economy secretary Neil Gray gave a rare written authority in May to plough ahead with supporting the delivery of the two ferries at Ferguson Marine in May, saying it is the "platform upon which future success can be built".

Greenock Telegraph: Neil Gray

He said that non-delivery of the ferries at the yard would put its future and the jobs it supports "in jeopardy".

It heralded the sanctioning of an extra £72.6m in capital spending on the ships. That was made up of £15m approved in December last year and a further £57.6m for 2023/24.

Just before Christmas the Tele revealed a warning of further delay and extra costs on the ferries in a quarterly update by Ferguson chief executive David Tydeman, which was described as  "extremely concerning" by the wellbeing economy secretary.

It has now emerged that advice given from the Scottish Government's directorate of economic development and sent to both the First Minister and Mr Gray provides a warning from Teneo that extra costs would be anticipated over and above that which was considered in the value for money assessment.

The advice given in May states: 'The strategic outcomes sought when [Ferguson Marine] was taken into public ownership were to ensure completion of new lifeline ferry services (vessels 801 and 802) and secure a sustainable future for the shipyard, thereby retaining jobs and key commercial shipbuilding skills in Scotland and strengthening national resilience.

'Whilst the delivery of [the ferries] has been hampered by delays and budget overruns, their importance in terms of essential service and network resilience remains extant and has arguably strengthened given the increasingly ageing ferry fleet and well publicised challenges in securing temporary replacement vessels (cost and uncertainty).'

The advice marked 'official sensitive - commercial' states that costings provided by the chief executive Mr Tydeman had been 'interrogated rigorously both by officials and external commercial experts (Teneo)' because of 'historic concerns about the accuracy of forecasts'.

It said that while the delivery of Glen Rosa was not value for money 'Teneo also consider that based on [nationalised Ferguson Marine's] track record there is a potential for this gap to widen further in the months ahead'.

But the First Minister was told by Kate Hall, the Scottish Government deputy director of strategic industrial assets, that a full funding decision was "urgent" because Ferguson Marine had already incurred costs.

She said: "It is advised that there is no specific number allocated in the request given the uncertainties of the potential final cost.

Greenock Telegraph: Ferguson Marine Image: Newsquest

"However we believe it is important that there is no 'blank cheque' for the vessels and therefore, as part of the correspondence, we have set out a strengthened approach to the monitoring and control of costs and delivery schedules with external commercial advisers providing quarterly reports on progress and projections.

"This would sit alongside the structure with [state-owned ferry and port owners] CMAL as technical advisers and ensure that ministers are sighted on the ongoing financial position and if any previous agreement, such as the written authority, had to be revisited."

The value for money study by consultants Teneo, which cost the taxpayer £620,000, has remained under wraps - with not even an edited version allowed to be seen.

Also being kept under wraps is a report by consultants First Marine International (FMI) into operations at Ferguson Marine, as part of wider work to evaluate the shipyard’s productivity which supported the analysis of proposals for continued investment.

A Scottish Government spokesman said: “The Scottish Government remains committed to being as open and transparent as possible in relation to decisions around Ferguson Marine (FMPG) and vessels 801 and 802.

“The due diligence concluded that the value for money criteria were met for Glen Sannox. In setting out the decision to issue a written authority to enable work on vessel 802 [Glen Rosa] to continue, there was clear, cross-party acknowledgement that this was the appropriate course of action - not least as it presents the fastest possible route to getting vital new ferries into service.

"Any updated projected costs are set out by the [Ferguson Marine] chief executive in his quarterly updates to parliament."