Scottish Government delays tendering west coast ferry services until after Independence Referendum

In an announcement full of interest, Transport Scotland have announced that:

  • the Clyde and Hebridean Ferry Services will indeed be tendered as a single contract rather than unbundled;
  • tendering will not begin until ‘Autumn 2014′;
  • CalMac is to be given a three year interim contract;
  • the Scottish Ferries Review – which will be the policy framework within which the tender specification and contract award will be made, will be published by the end of 2012.

The excuse for this degree of delay and for the three year interim contract for CalMac is: ‘to ensure a robust and thorough procurement exercise is conducted that will enhance ferry services across the Clyde and Hebrides routes and consideration of adding new routes currently being delivered by local authorities’.

The Scottish Government has, through Transport Scotland, already been engaged in the review of Scotland’s ferry services since 2009.

Given such a timescale, the Minister’s announcement is open to only two credible interpretations, each of which is serious cause for concern – that this is:

  • an admission that even after the already lengthy review period, the Scottish Government is unable ‘to ensure a robust and thorough procurement exercise’ without an additional four year period – a total process time of seven years to 2016;
  • a brass-necked move to put what they intend to do – the removal of CalMac with the breaking of long loyalties and uncertain futures for existing staff – out of the way of influencing the vote in the independence referendum for ‘Autumn 2014′.

In the first scenario, an independent Scotland governed with this sort  of slomo capability – and how many other major issues does a government have to deal with simultaneously – would be going where, exactly?

In the second and the most probable scenario, no one should forget that this government has form in such a manoeuvre. The quality of the brass in its neck was clearly demonstrated in the unreasonable delay of the awarding of the contract for the Gourock-Dunoon passenger ferry service until after the 2011 Scottish elections.

The reasons advanced below for this scale of delay do not stand scrutiny. It’s not going to need three years to think and discuss whether or not to absorb into the bundle – say, Argyll and Bute Council’s little Islay-Jura ferry.

The Ministerial statement

Transport Minister, Keith Brown – now clearly reeled back into line with the First Minister on the matter of a single contract for the west coast ferry services, says of this massive governmental swerve on timescales: ‘Since my appointment as Transport Minister I have made clear my commitment to supporting our island and remote communities by ensuring we deliver safe and reliable services for ferry users.

‘We are providing record investment to deliver new cutting edge vessels [Ed: a matter to which we will return later], new ports and harbour infrastructure fit for the 21st century, and we want to see that continue.

‘To this end, I can confirm that we intend to take forward the procurement of the new contract for the Clyde and Hebrides Ferry Services as a single contract. We have looked closely at the options available to us to drive up ferry service standards and no compelling case that tendering individual routes  – or ‘unbundling’ the current contract – has been put to me.

‘This decision will allay fears stoked by some that we are seeking to break up routes for individual operators to run.

‘To facilitate a thorough and robust procurement for the new contract, CalMac are to be awarded a new three year interim contract to deliver services when the current contract expires next autumn. CalMac’s status will not change – the company will remain under our ownership, delivering services on behalf of Scottish Ministers under the same terms and conditions. The services they deliver will not change. The new three year contract award will also provide certainty for CalMac staff and the local communities CalMac serves.

‘The interim three-year contract with CalMac will allow the necessary detailed preparation work required to finalise the scope of the new contract to be completed. This work includes consideration of the expansion of the Clyde and Hebrides Ferry Service to include some services currently being delivered by local authorities as outlined in our Draft Ferries Plan. This will also allow scope for further discussion with the Commission around the potential for raising the six year maximum contract length currently specified by the European Commission.

‘In this regard local community needs must be assessed and negotiations with councils taken forward. This interim arrangement with CalMac will also allow the next six year contract to fully incorporate the outcome of the Final Ferries Plan due to be published by the end of the year. This arrangement will allow this work to be successfully concluded, the scope of the tender specification finalised and then a full competitive procurement exercise undertaken.

‘Since 2007 the Scottish Government has provided ferry services with over £550 million of support and most recently awarded a new £242 million contract for Northern Isles ferry services – a contract already delivering enhanced passenger services to and from Orkney and Shetland.

‘We want to further improve on this how we have procure and deliver future ferry contracts. Our Final Ferries Plan  – the Scottish Government’s vision for ferry services to be published by the end of the year, will provide a blueprint for ferry services right across Scotland over the next decade with the new Clyde and Hebrides Ferry Service contract at its heart.’

Extending the contract period

The issue raised above by Mr Brown – of possible discussions with the EC on extending the contract period from the current six years  is a matter associated with capital investment inducements to or requirements upon a bidder, offering more time to recover and return on such investment.

Taken alongside the current state-owned asset holder, CMAL [Caledonian Maritime Assets Limited] having spent a considerable time ‘unbundling its single contract’ into a veritable fleet of individually contracted menu items, the picture looks very like am anticipated deal with Serco. Secro is the private sector surprise winner of the Northern Isles contract – with the bidder open to provide some new boats from its own resources. Without government funding for boats, the state owned CalMac would not be in a position to offer this desirable addition to its bid; and the scoring of the bids might well carry a weighting towards such an offer.

To a government that seems hell-bent on divesting itself of any direct responsibility to its electorate for lifeline services, this form of deal with Serco would have the additional benefit of setting CMAL on the road to being the last of the Scottish state owned companies closed down in the ferry provision spectrum. This historical footnote would be essentially complete.

CMAL would be en route to becoming no more than a maintenance facility for ports and harbours, although even at the moment, it is hard to  see what else it does. The CalMac fleet passes though its accounts on a paperwork exercise to allow the Scottish Government to perform a reverse dance of the seven veils for the European Commission.

But the introduction of a private sector, single service provider also owning a potentially increasing number of its own boats, carries a threat to the scope of CMAL. Piers and harbours could logically be placed in the care of Transport Scotland.

The service threat from a single private sector operator

A single private sector service provider is also a substantial threat to some communities currently served by lifeline ferries, already under notice of change.

The RMT union as well as anyone else with a brain, is known to see the single contract for the current Clyde and Hebrides services as potentially unattractive to private sector bidders. There is the precedent of the tender attempt in 2004 which found no bidders at all, not even the state owned CalMac.

A private sector company exists to make a profit. It has shareholders to satisfy. Not one of the lifeline Clyde and west coast ferry services makes a profit when the state subsidy is subtracted. Even with the subsidy, what they can achieve is not the sort of return ambitious private sector operators are aiming at.

As it is, the bundle of route services for the Clyde and west coast has evolved according to the immediacy of need and supply. There are all sorts of ships with several different service functions, different crewing needs, different destination set ups and a variety of berthing arrangements.

As it is, this bundle embeds substantial overheads specific to its variety. Only certain boats can berth at certain destinations. Only certain crew are trained to the levels required by each type of boat. Several routes run between destinations where they are the sole service.

All of these elements – and there are others, prevent the integrated use of centralised or shared resources and inevitably drive up overheads.

Any ambitious private sector operator is going to want to see a much leaner, cleaner package, one that would offer the sort of economies sketched in above.

Scottish Government preparing the ground?

We see in the propositions of the Draft Ferries Review, signals of the Scottish Government’s work-in-progress to deliver this sort of all-in package, to have a chance of attracting a private sector bidder.

Take some Argyll examples of the planned Spring clean.

The Arran-Kintyre [Lochranza-Claonaig] service is listed for potential scrapping, alongside moves being made to attract Campbeltown to being given an extension of the Ayrshire-Arran [Ardrossan-Brodick] service. Only a desk-bound planner could imagine that there is serious traffic potential in this route extension. But it would be a way of offering greater subsidy to a private sector bidder; with reduced overheads through the parallel abandonment of the Lochranza-Claonaig service.

This service is intended to make Campbeltown think it’s got a bonus. In fact, all it would have been given, if it accepted the ‘offer’, would be another service whose inevitable failure would be laid at Campbeltown’s door as a graveyard of aspiration and of efforts to help it. This would be grossly unfair and of long term damage to the town’s prospects,

There are potential strategic assistances for Campbeltown which are attuned ti its organic development, with weighty private sector investment. These assistances would be left unexplored in the headlines and the cost of the backdoor proposals for the Ayrshire-Arran extension. We will shortly be looking to cost the differentials between these two options for development.

The Oban-Lismore service faces scrapping, with the island left to focus only on what can be done between Point and Port Appin to the north. Many residents of Lismore work in Oban and the ferry makes that commuting possible. A Port Appin-only service would remove job opportunities the island needs for its sustainability.

Both services between the Ardnamurchan peninsula and the Isle of Mull are under threat – Lochaline-Fishnish and Tobermory-Kilchoan. These are fully lifeline services and their removal would leave the entire Ardnamurchan landmass left to struggle to Fort William as best it could. It takes no more than a glance at a road map to show what these services enable and where their loss would leave Ardnamurchan – and Mull. The Lochaline ferry plays a substantial role in supporting residence in Mull, by enabling quicker transfers between Fort William and the island via the Corran Ferry at the narrows on Loch Linnhe.

The loss of these services would impact directly on Mull’s and Ardnamurchan’s joint tourism offer, which is uniquely attractive.

None of these aspects of the draft Ferries Review are about utility or need or service. They are about stripping out of the house the clutter that sustains normal life, in order to attract a new buyer.

With seven years to prepare, this is going to have to be flawless

The Transport Minister says above: ‘Our Final Ferries Plan  – the Scottish Government’s vision for ferry services to be published by the end of the year, will provide a blueprint for ferry services right across Scotland over the next decade with the new Clyde and Hebrides Ferry Service contract at its heart.’

The decade in question looks significantly less substantial when you take out of it the three years now assigned to recovering the wasted thinking time of the last three years and the next two distracted by the imperative of shoring up the independence vote at all costs.

Only a week ago  – a long time in politics – the Minister was himself proposing to tender the Clyde and Hebridean routes first and publish the Ferries Review policy some time afterwards – as an addendum and not as a guide  – a matter on which we rightly poured scorn,

Now he’s done what we consistently predicted he would do – and gone for a major delay.

This can have real advantages no one should ignore or discount.

We will all have the final Scottish Ferries Review policy blueprint by the end of this year. We will then be able to decipher the government’s intent and to monitor its use in determining the future of the lifeline and other ferry services.

With a seven year gestation process, we will have every right to expect an unimpeachable and all embracing strategy and to monitor closely its demonstrable production of the tender specification, process, award of contract and delivery of these crucial services.

With the arrangements now proposed, there will  be no hiding place – for government or for civil service officials charged with enactment. They will all have had their seven years.

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17 Responses to Scottish Government delays tendering west coast ferry services until after Independence Referendum

  1. Disgraceful governance. Seven year timescale.
    Why did the SNP not extend by three years the Gourock/Dunoon route until they got the correct ferries for the route.
    The Ferries review will be interesting reading.

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  2. The delay until after the referendum is because they know what a stushie there will be when the actual plans are revealed (remember the delay on the Dunoon-Gourock route until after the election).

    Lets look at what Brown said in the context of the Dunoon-Gourock experience;

    “deliver safe and reliable services for ferry users”
    Safe, well they have had an enforcement notice served on them and there is an investigation under way that could lead to prosecutions.
    Reliable – hardly. Though what he probably means is we will exclude anything that might make he service seem unreliable, like the weather, from the contract. That way the service will be 100% reliable, just like on Dunoon-Gourock where the service has been 100% reliable for the last 2 days whilst not running.

    “We are providing record investment to deliver new cutting edge vessels, new ports and harbour infrastructure fit for the 21st century, and we want to see that continue.”
    Sorry but the promised vehicle ferries for Dunoon-Gourock were not delivered. Instead we got a couple of bathtub boats that cannot run in the weather and run a half-service for at least 4 weeks each year because there are no relief vessels.

    A guess “cutting edge” must mean they make the regular users bleed with frustration, loss of earnings, extra costs, problems with work……

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  3. The implication is, should we vote YES, those of us lucky enough to stay in the wettest, most inaccessible and poorly maintained areas should consider BYOB (Buy Your Own Boat).

    The idiots in Edinburgh are working hard at turning the town into Scotlands version of a London-centric disaster.

    Until the SNP grasped power, I really was strongly in favour of independence. However, I am not in favour of “Meet the New Boss, Same as the Old Boss” politics and rather suspect other folk will feel similar.

    It’s quite ridiculous the driving force for a NO vote are the SNP. Do they really think they will pull the same stunt twice with ferries?

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  4. This is the latest in a long line of difficult decisions that have been kicked into the long grass until after 2014.

    Good governance is not just about giving people good news. It is also the responsibility of a good government to be honest about the problems that will face them.

    The SNP purports to be a progressive party, committed to social justice and governing us as a social democracy. They have made plenty of promises which certainly fit that profile but their actual track record seems to consist of nothing more than a few giveaways e.g:-

    • Free prescription charges, at a cost of substantial delays in the use of more expensive medications;
    • Frozen council tax for those who can afford to pay, at the cost of council jobs and a reduction in council services and/or vastly increased charges for the most vulnerable;
    • Free bus passes for all over 60’s at the cost of cuts in local bus services;
    • Free tuition fees at the cost of reduced places, lost jobs and poorer further education for those less academically gifted.

    These measures are undoubtedly attractive to those of us who feel a tad squeezed. Unfortunately they have desperate consequences for those who have to suffer the results.

    They also have the added attraction for the Scottish Government that they have given the free service but local government/education establishments have had to make the cuts. Taking from the vulnerable to give to the wealthy is not what any reasonable person would call either progressive or socially just.

    This whole approach can be seen in the nutshell that is the Crawford Beveridge Independent Budget Review, commissioned by the First Minister himself, which concluded, “The continuing provision of a range of universal services on the same basis as at present is unlikely to be affordable in the face of the projected financial challenges. Alternative approaches should, therefore, be considered as a matter of urgency.” That report has now sat in the long grass for 2 years and will probably remain there for the next Scottish Government to do something about.

    So one is hardly surprised that the latest difficult decision results in a 7 year preparation time for a 6 year contract. You really couldn’t make it up – oh, wait a minute – the SNP government just has!

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    • Ah – you seem to be forgetting, Bob, the referendum is far more important than anything else and ministers and government officers must make it a priority in order to win. They can’t waste their time on minor issues such as the west coast ferries.

      As for the giveaways – why not make the rich richer? Surely this will make them more likely to vote positively in the referendum. After all, those on low income were getting them free anyway.

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    • Bob

      I agree with the overall theme of your post, that being a need for good governance, for honest about difficulties and also about making difficult decisions and this must apply to all parties.

      However as you are open abut your allegiance to the Labour Party and therefore criticism of the SNP in your post is politically motivated I think, in the interest of good governance and honesty, it would be appropriate for you to be transparent about the Labour Party position on the items you bullet pointed.

      Free prescriptions – supported by the Scottish Labour Party. Jackie Baillie even went on record as saying it would not have happened without the support of Labour in the Scottish parliament.

      Council tax freeze – initially opposed by Labour, then Iain Gray changed his mind in the build up to the election and supported a two year freeze (his reasons for this were?), Labour lost and and Labour u-turned again under Lamont’s leadership.

      Free bus passes – The Scottish Labour introduced this.

      Free tuition fees – something of a bedrock of Labour policy over many decades until recently.

      So yes the Scottish Labour party have now had massive policy rethink and just announced they are thinking of scrapping stacks of benefits with Lamont calling them election bribery. However lets not forget that they are all policies either supported or originally introduced in some way or form by the Labour Party and whilst u-turning by politicians and political parties is nothing new and not always a bad thing (and happens within all parties) – a u-turn quickly followed by an attack on another party for those policies almost as if your one would never have considered such crazy ideas, is cheap politics, doesn’t adhere to your desire for ‘honesty.’

      As for the main story – of course it is ridiculous that it has taken this long to get practically nowhere and on the ferry issue the SNP had a lot of questions to answer and are struggling to come up with any which are credible.

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      • Integrity,
        Points, mostly, well made.

        As you point out, Labour did introduce many of those universal benefits and, in the context of the finances available, I was proud that they did.I would love to see them continue if the money were available to ensure that they are not paid for by cuts to the most vulnerable .

        The two that I didn’t agree with, free prescriptions (I thought the money could have been better spent elsewhere in the NHS) and the council tax freeze (I’m still suffering mental whiplash from Iain Gray’s mid election, ill-judged, political handbrake turn on that one) did seem to be nothing more than giveaways to those most likely to vote.

        The Scottish Labour Party has now mustered the political courage to challenge all aspects of spending, including universal benefits, if we are to serve the cause of social justice in these tough times.

        However, the point I was trying to make was that the ferry decision should come as no surprise. The current Scottish government is a serial offender when it comes to kicking difficult decisions into the long grass. After all, they did it with the Campbeltown service despite Jim Mather’s promises to the contrary.

        Indeed, if kicking stuff into the long grass were an Olympic sport, we could probably add a few more “Scolympians” to the current role of honour

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        • Fair enough Bob,

          Personalyl I am in favour of all benefits being mean tested, if a system an be introduced which facilitates this without the cost of it exceeding the benefits that would have beeen awarded.

          The CT freeze I don’t agree with as I feel it is removing the only power local authorities have for raising income to support local policy. The fact that councils are given a ‘bonus’ grant if they sign up to it (which really means they are penalised if they don’t) is, for me, too much of a dictatorial model which is imposing central policy where local policy is often better placed.

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  5. Uttrer nonsense of course a seven year procurment for a six year contracxt.And the reasons blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah, Referendum blah, blah.

    blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah, Referendum, blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah.

    Blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah,blah, blah.

    What a complete and utter abdication of responsibility from an snp gvot that would sell it’s granny to win a referendum BECAUSE NOTHING ELSE MATTERS ((c) Wee Eck)

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  6. As an island resident and one who cold be majorly affected by the outcome of the Ferries Review (and I shall be extremely surprised if that the seriously inadequate organisation known as Transport Scotland has really listened to the people upon whom the impacts and reality of the impacts in preference to a a set of Edinburgh based bureaucrats are not only ignorant but wish to remain so, at least if my experience of attempting to communicate with them is anything to go by.

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    • This was floated in the draft Ferries Review – with the Transport Minister saying recently that no decisions had yet been made. With this news, they obviously have been. So, with boats on order and the routes to be tendered as a single bundle – quite why is the tendering going to take another four year?

      Like or Dislike: Thumb up 0 Thumb down 0

    • Could be Transport Scotland and the SNP are searching the world for more vessels like the Ali Cat and the Argyll Flyer so island residents should certainly be very concerned for the future if the fiasco on the Dunoon – Gourock route is an example of them listening to people.

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