Whisky bosses back private ferry options to help end service chaos

The Scottish Whisky Association has backed calls made by the Scottish Government's Highlands and Islands Enterprise agency for better air links - saying it "might offer certain advantages".

But it has said that for business transport there are currently "no viable alternatives to maritime" and said that there could be scope for other privately run services to get involved.

The Scottish Government's Highlands and Islands Enterprise agency has provided £15,000 of public money to allow a group of islanders investigate taking routes off state-controlled ferry operator CalMac.

The feasibility study is looking at alternative ownership of ferries in the wake of concerns over continuing disruption and cancellations to services with an ageing fleet in which four out of ten major vessels are now over 30 years old.

The HIE agency has provided the full amount to cover the cost of the study into whether services could be run by a community enterprise as an alternative to what the Mull and Iona Ferry Committee (MIFC) calls the current monopoly controlled by Scottish Government-controlled bodies.

Ministers and the First Minister have repeatedly stated there are no plans to unbundle ferry routes.

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 soaring from £97m to nearly £340m and delivery over five years late.

In a new analysis, the association has said: "There might be scope for third parties to offer alternative services, perhaps even freight-only on certain routes, but that would be based on commercial factors. Some commercial operators have expressed an interest in offering a commercial freight-only service on some routes, but nothing has so far come forward."

Twenty-one Scotch Whisky distilleries can be found on nine of Scotland’s islands. Islay is home to 10 distilleries and a maltings plant whilst two are located on each of Arran, mainland Orkney and Skye. Other island distilleries are found on Harris, Jura, Lewis, Mull and Raasay.

In 2021, 44 bottles of Scotch Whisky were shipped from Scotland to around 180 markets around the world each second, totalling over 1.3bn every year.

In 2021, Scotch Whisky exports were worth £4.5bn, accounting for 75% of the nation's food and drink exports.

More than 11,000 people are directly employed in the Scotch whisky industry in Scotland and over 42,000 jobs across the UK are supported by the industry.

Some 7,000 of these jobs in rural areas of Scotland providing what the association says is "vital employment and investment" to communities across the Highlands and Islands.

And before the pandemic, in 2019, there were 2.2 million visits to Scotch Whisky distilleries, making the industry the third most popular tourist attraction in Scotland.

The SWA said that the ferries are an "essential part" of the industry's supply chain and are used to bring the materials necessary to produce Scotch Whisky including cereals, yeast, casks, packaging materials and fuel. They also transport spirit and by-products to the mainland.

In a circular for MSPs looking into the reliability and sustainability of the ferry fleet, the SWA warned: "They bring visitors who contribute to the island economies, but also workers and materials that are required as the industry continues to invest in new distilleries or maintain or expand existing ones.

"Despite the critical importance of ferries, like many island users, SWA members have expressed their frustration and concern at the service provided, particularly on the Clyde and Hebrides network. Put simply, the service is holding the industry back which is in-turn holding up growth and development in some of Scotland’s most iconic and remote communities.

"Our needs are for a reliable and resilient service that meets current and future demands.

"Immediate priorities should be to improve reliability and resilience, improve the ability to respond (‘rebound’) following service cancellations, and improve freight capacity – current these services are failing.

"In terms of visitors, we have heard that many have been put off returning where they have had a bad ferry experience. This will have an obvious impact on island tourism and economies."

Peter Clark, industry deputy director of the association is expected to give his take on the ferry crisis to MSPs at the Scottish Parliament today (Tuesday).

HIE has said the MIFC-commissioned study on unbundling will help inform the "wider discussion across island communities on this important issue".

The committee have used the money to prepare a tender for an independent consultant to examine the different forms a community-owned ferry company could take, and to assess the feasibility of such an undertaking.

They believe the study could provide lessons for a wider unbundling of services for other island communities.

Retired naval architect Euan Haig said that any form of unbundling or privatisation will probably result in cherry-picking, but said "the near-inevitability of that should be accepted and maybe welcomed".

"Busy routes should be commercially attractive and easier to remove as burdens on public finance.

"Some services such as Tiree and Colonsay might always need to be accepted as depending on public support, and why not? Unbundling or privatisation could have the helpful result of exposing which routes must have taxpayer support, whilst separating off those that do not.

"It is blindingly obvious that Transport Scotland, CalMac and Caledonian Maritime Assets Limited [which owns the ferries, ports, harbours and infrastructure] are not remotely capable of managing such a widespread and varied business as a ferry service for all the islands, so why let them keep trying.

"In these cases the objective must be to run their ferries by organisations driven by normal ‘rational and economic’ motivations. That rules out CalMac and CMAL, and the people who currently manage them. There is scope for their management to be dominated by islanders, and allow their self-interest to make the running.

"It is just too difficult to continue trying to run a ‘one-size-fits-all’ system for all the islands, especially with the present structure. So why try?"

A Transport Scotland spokesman said: “We will reflect carefully on the comments made by HIE and the Scotch Whisky Association. It is important that everyone with an interest in the future of Scotland’s ferry services feels they have a way to engage with the development of routes, vessels and services.

"As part of the forthcoming islands connectivity plan, we will set out a long-term investment programme for vessels and ports which the Project Neptune report called for and islanders need to see. There will be a period of consultation on that plan and we would of course welcome the views and input of statutory agencies like HIE as well as local businesses which transport goods, services and people to and from our islands."