Ministers say there is "merit" in a move to scrap Scottish Government-owned ferry and port owner CMAL to be merged into a new national body as part of a revolutionary culture change in the way lifeline services are provided by ferries.
It has been said there is also "a case to made" for Scottish Government-owned ferry operator CalMac to also be abolished and merged as part of the move.
It has been confirmed that the Scottish Government is actively considering a move to create a special integrated ferries body in the wake of a recommendation that emerged from a damning Scottish Government-commissioned community consultation response analysis over the future of Scotland's beleaguered ferry network.
It came from an overview of a series of consultation meetings produced by the Ferries Community Board - formed as part of CalMac's franchise bid for the Clyde and Hebrides Ferry Services (CHFS) contract to be the voice of the communities - for the Scottish Government. It said that a strong case has been made for including the ferries division of the Transport Scotland agency into the new body.
READ MORE: Hyslop hits back at 'negligence' claim over delay in deciding on ferry contract
It has been suggested that would involve scrapping both Scottish Government-controlled ferry and port owner CMAL and the operator CalMac.
An analysis of common community themes said the current arrangements for running ferries encourages "abdication of responsibility... self-interest and territorial behaviour combined with a duplication of resources and a slow decision making process".
It says there is an overriding feeling that the present system is "just not working for the people it should serve" and that there is a "lack of long term planning from a strategic level".
The responses to a Scottish Government-commissioned consultants' study into the future of ferries says that from a business perspective many felt that issues over the ferries were leaving many firms "unsustainable".
It calls for a single ferries board to be formed to oversee the function of ferry provision including the role of Transport Scotland.
The skills mix for the board would include a "sizeable" representation of knowledge island life and also marine expertise of operating ferry services.
Another suggestion was to consider scrapping CMAL to merge with a specialist group within Transport Scotland to create a Ferries Scotland agency.
There has been concern over the management of ferries being cocooned inside three levels of Scottish Government-controlled bureaucracy.
This features the Scottish Government agency Transport Scotland as funders, CMAL, and service providers Calmac. Add to that 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.
Transport secretary Fiona Hyslop has confirmed there is "a case to be made" for both routes towards creating an integrated ferries body saying that she had listened to a range of opinions "not least the Ferries Community Board".
And she said the suggestion of a merger of CMAL and parts of the Scottish Government agency which is linked to ferry provision and services to create a Ferries Scotland agency "has merit".
She has indicated that she took the move to consider the future of the CHFS contract first having stated that a preferred option is to give a new long-term uncontested contract directly to CalMac without going to competitive tender. It is understood that one option is to let CalMac operate the contract "in perpetuity" as a wing of government.
"There are a number of key steps that we have to take in in all of the ferry process areas. Clearly, I took the decision to move on the CHFS contract.
"I have been involved over many, many years prior, prior to this, in other portfolios, when you reorganise different bodies, and you bring together that quite clearly, would have a level of disruption, and that's all at a time where you're bringing in six new ferries. So I think there's an issue of timing, and in terms of the process, sorting the CHFS contract is a priority," said Ms Hyslop.
"And that in itself, has governance issues, particularly for CalMac. Even if you wanted to, for example, to do a merger and I don't want to get hares running that that's happening overnight, or anything like that, there are governance issues that have to be legally put in place to do certain things. So, the order which we do things I think is very important."
The community engagement over the future of ferries came after the Project Neptune investigation carried out by global consultants EY (Ernst and Young) issued scathing criticisms of the existing governance structure for the lifeline island ferry services.
It criticised an “absence of long-term planning”, with a “sub-optimal” approach to the maintenance and replacement of vessels, potentially causing “higher than necessary or unforeseen maintenance costs”.
It also supported a move to turn the ferry owners CMAL and operators CalMac into one integrated publicly-owned company responsible for the operation and the supply of vessels on the west coast of Scotland.
A ferry user group official said that it was "about time" that there was "clearing thinking" from the Scottish Government over the way forward with the beleaguered fleet.
He said: "There has been much talk but little action just on making a decision over ending the over-bureaucratic nature of these multiple agencies responsible for ferries. Change is needed now if we are not to go through another decade of farce over the management of the CHFS network."
The Competition and Markets Authority has previously expressed concern about the "potential risks" of state control over the way ferries are operated, run and paid for.
CalMac's current £975m eight-year Clyde and Hebrides Ferry Services contract expires in September 2024. It had previously won the contract for six years in 2007 – after ministers were forced to tender for routes to satisfy European competition rules.
A final decision after a due diligence process – which will establish the feasibility of that direct award approach from a financial, operational and legal perspective – is expected in the summer, with an aim to have the new arrangement in place by October 1. But due a delay in reaching a conclusion, CalMac have been given a year extension of the contract.
The Ferries Community Board is opposed to the direct award, saying that to gain community support for a long term directly awarded contract, they would need to see "significant change in the structure organisation and culture of the management and operation of the ferry services".
It says it would want to see a "radical overhaul" of the contract itself with "revised measures of success and far greater accountabilities" to the communities served by the ferry services in Scotland.
Ms Hyslop has told MSPs at the Scottish Parliament transport committee: "I want to reassure you that the options are there for us to consider. But I also want to make sure, you're talking about people's jobs, their careers, so I don't want to unnecessarily worry or perturb anyone.
"I just want to make sure that I am very acute to the opportunities that there will be to try and simplify and rationalise that process. But it's not just as I know from previous experience, about physically or organisationally bringing bodies together. It's about their vision and also their culture."
The transport committee has recommended that ministers should consider scrapping CMAL to create the new ferries agency while giving the beleaguered ferry operator CalMac a longer contract to continue lifeline services.T
It comes as the transport secretary indicated there does not appear to be any barrier in providing an uncontested award of a lifeline ferry contract to CalMac.
She spoke while the Scottish Parliament's transport committee convener Edward Mountain said islanders would not be able to understand how ministers had not been "negligent" in their duties in delaying a decision over the future of the ferries contract.
It is understood that ministers are examining providing a permanent contract to CalMac giving it the right to run lifeline services in perpetuity as "an arm of government" which has sparked a row amongst user groups.
The direct award without going through a competitive tendering process to state-owned ferry operator CalMac is the preferred option for the next contract over the future of lifeline ferry services.
CalMac's current £1bn eight-year Clyde and Hebrides Ferry Services contract expires in September 2024. It had previously won the contract for six years in 2007 – after ministers were forced to tender for routes to satisfy European competition rules.
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