I'm guessing their is a bug - it would be nice if Stardock would look into this. Here are some illustrations:
1) I have pirates set to rare - I have waaaaaay to many pirate shipyards in this game:

2) I entered god mod and looked at the shipyard, and yes! They are building something!

3) But when I hover over the shipyard under "currently building" there is some strange red icon, not the ship it is building

And here's what happens as I progressed a couple turns:
1) The ship has 1 turn left to build:

2) Hit end turn and it starts building it's next ship:

3) But what happened to the ship it just built?

So there are two bugs - 1) the settings for 'rare' are off, there should not have been as many pirate shipyards as I have on my map. And 2) The pirates are building ships but they seem to disappear!