Scotland's ferry fiasco: how the tangled web of operators and owners works ... in theory at least

Soon the fleet, connecting Glasgow to the isles and peninsulas of one of the world’s longest coastlines, was to peak at 36 packet ships.

It was never to be so big again, even more than century later.

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On the eve of the Great Depression, the MacBraynes sold out their family firm. Why? They had failed to raise the finance needed to upgrade their vessels and retain what had become essential for running lifeline ferry services: subsidies.

That was 1928. In those days state aid came by way of lucrative contracts to carry the post.

Scroll forward 92 years and the issues are the same.

How best to put Government money into ferries? And how to keep services going when that public funding – and fares – does not prove enough to provide a modern, reliable fleet and port infrastructure?

Add in European Union rules on state aid – or at least Scottish interpretation of those rules – and the result is an alphabet spaghetti of businesses and institutions.

The row over a contract for two new high-tech ferries – with the public purse looking at a potential nine-figure loss – suddenly thrusts some of these bodies in to the limelight.

So who are old man MacBrayne’s successors?

For most Scots, ferries, in the west at least, are synonymous with CalMac (in which the Mac still represents old man MacBrayne). This, after all, was how Scotland’s nationalised ferry company was colloquially known.

Now, a company called CalMac Ferries Limited, or CML, still operates most ferries on Clyde and Hebridean routes. It is based out of Gourock ferry terminal and is owned by a business called David MacBrayne Limited or DML, which is wholly owned by the Scottish Government.

CML operates 31 vessels and 27 harbours, almost of all of which are owned by another body with an almost identical acronym, CMAL.

This is Caledonian Maritime Assets Limited. CMAL, rather than CML, is the direct corporate successor of the old Caledonian MacBrayne company and it officially lists its foundation as 1889.

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In effect, CMAL owns most of Scotland’s ferries – including three operated by private company Serco

on subsidised routes to and from Orkney and Shetland – and many of the nation’s ferry ports. Like CML, CMAL is owned by the Scottish Government.

This has been how ferries have been run in Scotland since the last year of the old Scottish Executive. CML has secured successive franchises (against private competition, such as Serco) to run services using CMAL assets. Both CMAL and CML are companies, owned by the Government, not Government departments.

CMAL, using Government money, has been responsible for investing in ports and procuring vessels. The theory? That this arrangement – rather like in the railways – allows a free market of sorts. The reality? Ultimately, it is the taxpayer who owns, runs, subsidises – and now builds – the ferries.

In the saga of the purchase of the two now massively overdue and over budget new ships, it is CMAL that has come under fire.

The company’s HQ is in Port Glasgow’s historic town buildings, less than a 10-minute stroll from the shipyard where the hulks of two botched ferries, the Glen Sannox and the unnamed Hull 802, lie rusting.

The yard – Ferguson Marine Engineering Limited or FMEL (the acronyms never stop in the world of ferries) – is now also owned by the Scottish Government after it was nationalised following the failure of the contract.

The yard had been bought – rescued, it was reported – by tax exile Jim McColl.

An independent report by FMEL after its Government takeover painted a picture of amateurish mismanagement at the yard before nationalisation, including basic failures to keep track of stock and clean-up.

However, supporters of McColl have long briefed against CMAL and its executives. Last week, the businessman took aim at his one-time customers again. His point: they should not exist at all.

“We don’t need CMAL to be there,” the businessman told MSPs investigating how his contract had failed. “Before, it worked perfectly well with CalMac. It is surplus to requirements.”

McColl said CMAL executives had been civil in person but described a relationship which, via email, became testier. The businessman blames changes to spec on the boats he built from CMAL. The old CalMac, he said, “knew what they wanted”. His implication? CMAL does not.

CMAL chief executive Kevin Hobbs will get his chance to speak later. He believes MSPs have heard “serious inaccuracies”.

Opposition leaders see the debacle around McColl’s yard’s delivery of the two ferries as a political scandal. But will the fallout raise questions about the complex state-owned structures of CML/DML/CMAL/FMEL operating, owning and building ships?

Or are Scotland’s ferries doomed to face heavy seas regardless of how they are organised, as all of David MacBrayne’s successors have found?