SCOTLAND’S ferry network could be broken up under radical plans to revitalise the taxpayer funded service in a move that has raised fears that the most lucrative routes will be sold off to private firms.
It has emerged that global consultants Ernst and Young have been tasked by ministers to look into the "unbundling of routes into smaller packages" as part of options for "decentralisation" leading to concerns over the future for state-controlled ferry operator CalMac.
Details have emerged in a brief given to Ernst and Young for Project Neptune - which is examining the Scottish Government-controlled structure that underpins Scotland's ferry service.
It comes after the Competition and Markets Authority expressed concern about the "potential risks" of state control over the way ferries are operated, run and paid for.
There has been concern that the service is "cocooned" inside four levels of Scottish Government control with the Transport Scotland agency as funders, the procuring and vessel owning company, Caledonian Maritime Assets Ltd (CMAL), the ferry operators Calmac and the now nationalised shipbuilders Ferguson Marine (Port Glasgow).
Transport Scotland 'consultancy requirements' documents reveal that Ernst and Young are looking beyond whether the structure is "fit for purpose".
It asks the consultants to make a recommendation of a "potential route/structure for direct award of ferry services contract that Scottish ministers could consider as part of a future strategy".
It also ask the consultants to "include an analysis of the challenges and opportunities associated with options for decentralisation (unbundling of routes into smaller packages)."
It goes on: "Views are sought on whether corporate structures would allow direct award of contracts in future. However, no advice is sought on the merits of otherwise of that approach."
It comes ten years after transport minister Keith Brown said "no compelling case" had been made that "tendering individual routes or unbundling the current contract" would lead to greater benefits.
This was repeated by then First Minister Alex Salmond who told MSPs in 2012 that the "case for unbundling, in our estimation, has not been made".
At that time, there was concern that it would hive off CalMac’s four busiest routes, as suggested in a 2010 consultation on future ferry services.
The concerns were that the Ardrossan to Brodick on Arran, Wemyss Bay to Rothesay on Bute, Oban to Craignure on Mull and Largs to Cumbrae were to be split off as CalMac's contract expired the following year.
It comes as the state-owned ferry operator CalMac is having to handle an ageing ferry fleet with new lifeline vessels MV Glen Sannox and Hull 802 still languishing in the now state-owned Ferguson Marine shipyard, with costs of their construction more than doubling from the original £97m contract and delivery over four years late.
The debacle led to shipyard firm Ferguson Marine led by tycoon Jim McColl, who first rescued the yard going bust, leading to a Scottish Government takeover.
An investigation by MSPs on the Scottish Parliament rural economy and connectivity committee into the procurement of the ferries described it as a “catastrophic failure”.
It also comes amidst a series of issues with breakdowns involving Scotland's ageing ferry fleet.
While industry experts agree the working life of the ferries is 25 years, 14 of the 33-strong ferry fleet run is older than that, with eight past their 30th birthday.
Analysis using official data shows that from 1993, before devolution, to 2007, 12 ferries with a combined tonnage of 33,350 were launched - a replacement rate of one in 1.16 years.
In the following 14 years, while the SNP was in power and while the working life of the existing fleet was extended from 20 years to 35 years, only five ferries with combined tonnage of 16,188 were built - a replacement rate of one every 2.8 years.
West Scotland MSP Katy Clark has said she is "alarmed" by the development and has now called on the Scottish Government to “honour its commitment” to ensure the ferry services services are permanently run in the public sector.
The Scottish Labour representative says the long term failure by the Scottish Government to invest in new fleet is to blame for the ongoing crisis not the public ownership model.
The MSP who has repeatedly called on the Scottish Government to urgently come forward with an emergency ferries plan is submitting a parliamentary motion demanding the Scottish Government rule out privatisation of any routes going forward.
She said there was concern that the Scottish Government has reneged on a commitment it gave the Rail, Maritime and Transport Workers’ Union in 2017 to build the case for a permanent in-house operation of the Clyde and Hebrides Ferry Service contract.
Following discussions with Mr Brown, RMT believed lifeline ferry services to the west coast of Scotland would be delivered under a single contract "until 2021 at least and will be less attractive to private bidders"
CalMac Ferries Ltd promised ambitious plans to transform west coast ferry services as they took the eight year contract beginning on October 2016.
The RMT said at the time that it was a "major victory" in what it called "a successful defence of publicly owned and operated lifeline ferry services from privatisation".
Ms Clark said: “The ongoing ferries fiasco, with sailings frequently cancelled at short notice, must not be used as an excuse to privatise this lifeline public service via the back door.
“The network is crippled because of poor infrastructure planning and years of under-investment, with very few vessels commissioned in the last 15 years.
“This procurement failure is to blame and we need a serious strategy to commission new vessels. That must not mean scouring the globe for cheap second-hand vessels or a race to the bottom on conditions by chartering ships from anti-union operators.
“The Scottish Government must honour its commitment, outline its intention to keep CalMac Ferries public, with workers and communities consulted every step of the way.”
The current SNP policy on west coast ferries, first published two years ago states: "Public sector ferry operator – CalMac – continues to run Clyde and Hebrides ferry services. In the future, we intend to award this ferry contract directly to public sector operators if certain criteria can be met."
Gordon Martin, regional organiser for the Rail, Maritime and Transport Workers’ Union said the Ernst and Young brief raises concerns about privatisation, how lifeline services will be funded and about the future of CalMac.
"Project Neptune is a Scottish Government dictat to a private consultancy to look at possiblities and probabilities and that includes unbundling and privatisation.
"Unbundling is about selling off the profitable and which means someone will end up with the scraps that don't make any money. That is a privateering agenda.
"The ferry services need investment, so who is going to provide that?
"Some of the routes are not profitable in any way but the whole point is that it is a public service, it is about getting people from position A to position B and the only way you can do it is by having a lifeline service.
"The island communities are pushing for their own ferry, their own service. And that is playing into the hands of the politicians I think."
One ferry user group said that privatisation is not the solution and that what is needed is a radical rethink of management strategies over ferries.
Chris Atkins, secretary of the Arran Ferry Action Group said: "How would privatisation impact upon less attractive routes, which simply could not be maintained without subsidy.
"One of the driving forces behind privatisation is to attract investment, but considerable central funds have already been committed. Our overriding concern is to see this money spent wisely.
"There is plenty of evidence from previous privatisation to pour doubts on its potential efficacy as a solution to our current woes.
The benefits of privatised railways have proved geographically limited. Privatised power has lost nuclear to French EDF, and concentrated on gas, which is becoming unaffordable "Privatised water makes money for shareholders at the expense of contamination by sewage.
"And privatised health is out of reach of those needing the most care.
"For these reasons, we do not see privatisation as the answer to the provision of lifeline services to outlying areas. Rather, we believe radically better management of existing funding and facilities can provide cost-efficient services for all.
A Transport Scotland spokesman said: “The independent review of governance arrangements for Scottish Government lifeline ferry services will present a framework consisting of a range of options to the overarching objective of effective, efficient and economic delivery of lifeline ferry services, to enhance passenger experience and support local island economies.
“Once the final report has been considered by Ministers, there will be engagement with all key stakeholders to ensure the most efficient and best value arrangement to deliver our key lifeline ferry services.”
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