Scottish Shipbuilder Tapped for Innovative Workboat Enters Administration
A small, family-run shipbuilder that received UK government funds for an innovative project has lapsed into administration. Coastal Workboats Scotland was also unique for its location in the Outer Hebrides, with reports that it was the first shipbuilder in the area in more than 100 years.
The company relocated its shipyard operations to Goat Island in Stornoway in the Outer Hebrides under a November 2023 agreement with Stornoway Port. It entered into a 10-year lease for a site for the shipyard operations and had planned to develop the operations.
In 2024, it was part of a project selected under the UK’s Clean Maritime Demonstration Competition Round 3 that sought to provide funding to innovative projects that could advance key elements of sustainable shipping. This particular project was to demonstrate an Electric-Landing Utility Vessel that would operate in the Shetland Islands. The project was awarded a total of £6.2 million (US$7.6 million) for the demonstration of the vessel, with nearly £3.9 million (US$4.8 million) earmarked for the shipyard. The yard received a further £167,000 from Highlands and Islands Enterprise to support its development.
The project called for a fully electric workboat that would be the first in the UK. The team was exhibiting integration of hull design, propulsion, energy storage, and fire safety to meet regulations and inform future electric workboat guidance, and the project was to support the creation of a new regulatory framework. The boat was to be recharged with shore power, and to address the challenge of a lack of resources in remote locations, the power unit was to be portable and carried on the vessel.
The project was to demonstrate the operation on a 45-minute route in the Shetlands. It called for two daily runs, operating five days a week.
Damen Hardinxveld had contracted for two Landing Utility Vessels with the yard. Damen Gorinchem had also contracted for two tugs.
According to the reports, the yard’s financial difficulties grew in 2025, with the statement for the administration citing design issues and supply challenges. In February 2025, Damen Hardinxveld provided an additional £1.6 million in unsecured funding. By June 2025, reports said the yard owed over £12 million to creditors.
Administrators were appointed for the operation, with Stornoway Port reporting that it is working with them to determine next steps. Reports are that one of the vessels is on the slipway, but none of the five vessels have been completed. Some reports indicate that Damen is asserting ownership over four of the incomplete vessels.
Innovate UK, which administers the government funding, pointed to inherent risks and new technologies as well as new markets, saying it creates a risk that the businesses will fail. It said it would act “responsibly” in this case, in its role to properly manage public funds.
During the third round of the funding program, the UK selected a total of 19 projects with a total value of approximately £80 million in grants. At the time, they highlighted that the program overall had awarded more than £200 million in grants. The third round included projects for wind propulsion, hydrogen and ammonia, hydrofoil crew transfer vessels, low-emission passenger shipping, and several battery projects.
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