Call to give CalMac permanent contract to run Scots ferry services

A key Scottish Labour figure has called on the state-owned ferry operator CalMac to get a permanent public contract to run the ageing ferry fleet.

Katy Clark, the Scottish Labour community safety spokesperson, said that it was the "broken model" around ferry procurement that is failing islanders who rely on the fleet, not public ownership.

It comes after a Holyrood inquiry gave the nod to retain the status quo in terms of operating ferry services in the shorter term despite the ferry operator receiving some £10.5m in poor performance fines in the six-and-a-half years since CalMac took the franchise – nearly eight times more than in its first nine years in charge of the west coast fleet.

The Competition and Markets Authority has previously warned about the "potential risks" of state control over the way ferries are operated, run and paid for in Scotland.

There has been concern over the management of ferries being cocooned inside three levels of Scottish Government-controlled bureaucracy known as the 'tripartite' arrangement.

This features the Scottish Government agency Transport Scotland as funders, the procuring and ferry owning company CMAL, and service providers Calmac.

On top of that comes Ferguson Marine, the shipbuilding company that came under the control of Scottish ministers in August 2019 when it fell into administration under tycoon Jim McColl's control in the midst of a cost implosion and delays over delivery of two key ferries.

The Net Zero, Energy & Transport Committee inquiry said that beleaguered state-owned ferry operator CalMac should benefit from a direct award of an extended ten year contract to run lifeline services on the west coast of Scotland after the current deal ends in September, 2024.

It said it supported the length of the new CalMac contract from eight to ten years as it was needed to "ensure continuity of service and avoid disruption" with the current contract due to expire in September, next year.

Scotland's Ferries | MSPs keep door open for private firms to run Scots lifeline ferry services

Ms Clark, a West Scotland region MSP says that the deal should go further and raised concerns about private ferry operators "circling" to lobby instead for the unbundling of routes.

She said: "Whilst CalMac is far from perfect, we need to draw the correct lessons from the ongoing ferries crisis, with frequently cancelled sailings understandably leaving islanders at the end of their tether.

"My argument is simple: it’s not public ownership that’s failing Scotland’s ferry services but the Scottish Government’s poor management and broken procurement model, and the alternative of privatisation would be far worse."

Competitive tendering on the routes was only introduced in 2006, as the Scottish Executive – now the Scottish Government – said this was necessary to comply with EU competition law.

The life peer and long-term former MP for North Ayrshire and Arran says that post-Brexit it cannot be argued that tendering is legally required, and says that the Scottish Government acknowledged in its 2018 Ferry Services Procurement Policy Review that an in-house operator is "capable of delivering similar levels of operational efficiency, innovation and service improvement to those which might otherwise be obtained from tendering".

"Ministers know this, but still spent taxpayer’s money on commissioning accounting firm Ernst & Young to scrutinise how ferries are run," she said.

"The Zero, Energy & Transport Committee have since found the 'Project Neptune' report Ernst & Young produced to have failed to sufficiently engage with island communities or the workforce.

"And unfortunately, this is a longstanding pattern, with neither islanders nor trade unions represented on ferry boards.

"The truth is they don’t need a multinational to tell them why their ferries won’t run properly."

Peter Timms, chairman of ferry operator CalMac, warned the government in 2010 that ferry investment had been "slipping behind for decades" and produced an analysis which concluded that finance was urgently required on a longer term, regular basis "to just stand still".

Since his warning only five vessels have been launched to support the network, and only two are considered as major ferries. They are the 5626 tonne MV Finlaggan, built in Poland in 2011 and the 9058 tonne MV Loch Seaforth built in Germany and launched in 2014.

Before his warning vessels were being produced at a rate of one every 14 months. Afterwards ferries were typically being produced every 33.6 months.

"Residents understand CalMac must sometimes cancel sailing because of poor weather. What they rightly don’t accept are frequent, short-notice cancellations because the Scottish Government has failed to invest in infrastructure or replacing our ageing fleet," said Ms Clark.

"It's estimated around half of all state-owned vessels now past their operational life expectancy.

"With limited funding, CalMac’s endless temporary fixes only go so far, and they have been forced to rely on ministers who have taken a short-termist and panicked approach to procuring new fleet.

"Perhaps scarred by their own procurement and specification failures and the catalogue of managerial mistakes made at Ferguson Marine, the Scottish Government still show little interest in rebuilding shipbuilding capacity along the Clyde, even though doing so would be a more sustainable long-term strategy."

The former senior aide to ex Labour leader Jeremy Corbyn who became Baroness Clark of Kilwinning in September 2020 said it was now crucial that CalMac is placed permanently in public ownership and in the hands of the communities who rely upon it"

"Rather than allowing lurking business interests to characterise CalMac as a millstone, stakeholders at all levels need to look at models which give island communities and the workforce a genuine role in decision making," she said.

"Its potential to deliver an effective and efficient service is constrained by the present dysfunctional model, with decision-making split between different public bodies, and difficulties arising from debacles such as that at Ferguson Marine leading to an unsavoury blame game which benefits nobody.

"The priority for passengers, workers and island communities alike must be continuity and reliability. That will only come with a permanently publicly owned people’s CalMac, with proper investment and the exclusion of private profit."

A Transport Scotland spokesman said: “Scottish Ministers have no plans to privatise or split up the Clyde and Hebrides Ferry Services routes.

"The current Clyde and Hebrides Ferries Services contract is due to expire in September 2024 and we are currently considering the most appropriate route for continuity of services. We will continue to review all options, in order to deliver safe and sustainable ferry services to island and remote rural communities while achieving value for money.

"No decision on the detailed requirements of the future arrangements has been taken at this point, but we will work with key stakeholders, including island communities and the trade unions, to ensure the most efficient and best value arrangement to deliver our key lifeline ferry services."

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