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Special advisers are civil servants—they are temporary civil servants—so that was not an issue in that respect. You say that the meeting was a “big deal”—

The Government’s position is that, ultimately, we want all the commercial assets that we have taken ownership of to be back in the private sector, but we will have to make decisions about the point at which that becomes viable. We have not reached the point of decision on Ferguson’s.

Let me break that question down into whether it is normal for decisions on preferred bidders on contracts to be publicly announced, why it was me and whether it is something that I would normally do.

On whether it is normal to announce a preferred bidder, it is certainly not abnormal. Often, at the point at which a preferred bidder is being announced, if you think about it, the successful bidder—the preferred bidder—is being notified and the unsuccessful bidders are being notified. At that point, there is always a possibility that things will leak into the public domain anyway; so, often, a decision is taken to announce a preferred bidder. I could find you examples of other Governments doing exactly the same thing, such as the United Kingdom Government on a train contract and the Welsh Government a couple of years ago on a major roads contract.

As it happens, a few months after this announcement—this addresses your question on whether it is something that I would normally do—I announced, in May 2016 if memory serves me correctly, that CalMac was the preferred bidder for the Clyde and Hebrides ferry services contract. It was nothing to do with Ferguson’s in the broader ferry space; it was about the contract for the operator of the ferry service. I announced the preferred bidder for that, which would suggest to you that it is not completely unknown for preferred bidders to be announced or, indeed, for me to do it.

Finally, on why I, as opposed to a minister, did it, in any Government decision that leads to an announcement, there will be consideration within Government involving special advisers and communications officials asking, “Should this be something that the First Minister does?” That is how the media diary of the First Minister is determined. I will often get suggestions that an announcement is coming up and it is proposed that I do it, and that is what would have happened here.

Yes, but in my mind—I am trying to think—I knew that there were issues that he was expressing concern about. By that point, ministers were aware that there were issues around slippage in the contract. CMAL was reporting regularly to what was called the project steering group.

It was a conversation that I clearly thought that it was appropriate to have. Did I go into that meeting thinking that it was a great crisis meeting? No, nor did I come out of it thinking that. Mr McColl had concerns about cash flow, and he had had concerns about the structure of the milestone payments. He had a concern, which he continued to express, about the amount of money that, in his view—it is not a view that I or CMAL would share—was unfairly caught up in what I think had, by that point, become the surety bond that replaced the builders refund and the partial builders refund guarantee.

Those were the kinds of concerns that he was expressing to me. Not long after that, of course, he made the first claim to CMAL for additional costs over and above the contract. Clearly, at that point, tensions were already appearing in the relationship between FMEL and CMAL, so that was the nature of that discussion.

In the terms that I have told you, there was a reference—a couple of lines in the briefing—as part of telling me the self-evident point that negotiations were not concluded. There was a reference to the fact that the negotiations, which were still under way, included complexities around the level of guarantee. To be clear, though, it did not say, “And this is a matter of really big concern.” It just said that that was one of the things that was still being negotiated.

That was the point at which—if my memory serves me correctly—we commissioned the independent QC to look at the matter. At that point, we were all trying to see whether there was a way through.

CMAL’s concern at that point, in addition to its concern about the lack of progress on the vessels, was that the surety bond was due to expire, so things were obviously coming to a head for CMAL in that sense. The discussions from that led to the commissioning of the independent QC, and the view there was that there was no legal basis in the contract for CMAL to make those payments. The process, which ultimately concluded with nationalisation, continued after that.

I am trying to be honest—I do not, as I sit here right now, know the answer to that question.

By definition, preferred bidder status—versus final contract award—means that the final contract award decision has not been taken and negotiations are still on-going. I would have known that in general terms, but I have reviewed the briefing that I got for that event and it rightly says—which I would have assumed anyway—that there were still significant negotiations to be concluded before the final contract award. Although it is not flagged up in that briefing as a particular issue of concern, there is a very clear reference to the on-going negotiations, including issues and complexities around the level of guarantee that FMEL would provide. So, yes, before I made the announcement of the preferred bidder on 31 August, of course I knew that it was not a concluded negotiation, because it was still at the preferred bidder stage of the process.

I think that that refers more to the second loan than to the first loan.

We were certainly aware that the relationship was becoming progressively more strained and difficult. Ministers—principally the portfolio ministers of the time—would have been involved periodically in discussions and updates.

That said, a lot of effort was made—on both sides, I think, and I know particularly by CMAL—to keep the relationship where it needed to be for us to see progress on the vessels. If you go through CMAL’s various updates to the programme steering group, for example, and the updates that came through the expert that the Scottish Government commissioned, you will see that they contain many references to there being improvements at times, things working better and there being more confidence. Overall, however, and broadly speaking, that relationship was in a downward spiral.

It is not hard to understand the frustration that CMAL felt at having signed a contract of that nature, with responsibility for design and build passing to the shipbuilder, as is standard practice, yet all those issues were being raised that had not been raised at the time. I understand its frustration. Similarly, Jim McColl and FMEL clearly had concerns, which they voiced.

Ministers were aware of that and—again, I think that this is all reflected in the documents that have been published—there was definitely a view on the part of the Government that we wanted to encourage mediation. There was a period in which mediation was agreed to by both parties, but it did not happen. The chosen mediator was not available in the timescales that were necessary.

The contract allowed for mediation, expert determination and then court proceedings as the dispute resolution steps. CMAL’s view, I think rightly, was that expert determination was not appropriate here. Apart from anything else, that was because of the scale of the claim that FMEL was making outside the contract, which ultimately became £66 million. The right way to resolve it was therefore for FMEL to go through the court process, which—as was its right—it never chose to do.

Ministers were seeking to keep the relationship where it needed to be, to improve it and, where we could, to use our best offices to resolve the issues between the parties. In the published documents, you will see evidence of the Government seeking to do that all along in relation to the contract issues between FMEL and CMAL.

Beyond that, as is evidenced in the loan agreements, the consideration of the proposal that Jim McColl put prior to public ownership and then at public ownership—at all stages—we were also seeking to discharge the wider responsibilities of trying to keep the yard open and operational and protecting employment, as well as getting the vessels finished.