'No more monopoly': Islanders' CalMac replacement 'on the cards'

Former First Minister Nicola Sturgeon has previously insisted there are no plans to unbundle routes - which would raise concerns that the most lucrative routes would be sold off to private firms.

The Net Zero, Energy & Transport Committee says it wants to bring an end to the system for managing Scotland's lifeline services which "is not working".

And the inquiry report said that the ferry operator CalMac should benefit from a direct award of an extended ten-year rather than the current eight year contract to run lifeline services on the west coast of Scotland.

There has been an angry response in some quarters to the idea that CalMac should get a renewed contract in the wake of the management of disruption to lifeline services through breakdowns to the ageing fleet.

Ferry user groups have said that they would like at the very least to have more local control over ferry services.

Joe Reade, chairman of the Mull & Iona Ferry Committee, which has objected to giving CalMac a 10 year award, said that a plan for a possible community takeover of ferry services is "definitely on the cards" after undertaking a feasibility study.

The Western Isles Council, Comhairle nan Eilean Siar, has also floated the idea of a Western Isles bundle which would represent a "step change in connectivity" with management based within the islands.

It is understood that the results of the Mull and Iona study of providing a company established in the wake of continuing disruption are to be discussed with ministers.

The initial study findings are expected to be presented to island communities before any move is made to take services to and from Mull and Iona from Scottish Government-controlled ferry operator CalMac.

But he said it cannot go forward unless the Scottish Government consider the unbundling of services.

He said unbundling and local control of ferry services "should not be off limits" as it is.

"It has been assumed that unbundling equals privatisation and that privatisation equals no more public subsidy to the service, no protected fares, no guaranteed services, a sort of free for all, all of which is nonsense.

"There has never been a coherent argument as to why it is a 'no' to unbundling. But it deserves to be investigated.

"If the government is sincere about getting the best arrangements, the outcome of the results for islanders and taxpayers, then they have to look at all options, particularly options, that islanders themselves wish to be looked at. It isn't just us that think unbundling should be considered, the Western Isles has also been asking that it could be considered."

CalMac's parent company David MacBrayne Group (DMG) has received nearly £900m in taxpayer subsidies over six years from the Scottish Government to run the ferry services since securing the ferry contract in 2016. The level of handout has soared from £131.939m in 2016/17 to over £163m in 2021/22 including £11.7m in Covid funding.

"All routes are commercially viable, if they are being paid for by the government, which is what they are now. All routes are subsidised now. None are profitable," said Mr Reade. "We are talking about delivering a publicly subsidised, heavily regulated service through a multiplicity of companies or bodies, rather than what we have which is a monopoly.

"All unbundling is opening up it up to wider competition, and removing that protection of the monopoly.

"Whatever reform is enacted, it must have the needs of island communities at its heart, who currently have little say in the service on which they depend. The islands need efficient, comprehensive, reliable, high capacity and affordable ferry services," he said.

Sam Bourne, chairman of the Arran Ferry Action Group said the problem is in finding another operator to take the place of CalMac said it was wrong to rule out the bundling of services.

"It could be community owned, or it may be through private operators, but currently that is outwith what is on the table," he said. "I think unbundling should be properly considered."

On South Uist, where it would be expected that the ferry service would need to be subsidised - there was some disdain over the view that CalMac would continue to become the operator of choice.

But local control of services is supported by some.

The South Uist Business Impact Group organised a major protest earlier this month over a June-long cut to sailings to the mainland because of ferry breakdowns to the ageing fleet.

And after a series of meetings ending with a public meeting last week attended by CalMac chief executive Robbie Drummond, the group said islanders left the meeting with "zero faith restored in CalMac, with many stating that listening isn't enough and that immediate action is required".

They say at the very least, any ferry operator’s head office and senior management must be island based so that the "lived experience of island communities and ferry customers" is at the heart of future decision making.

John Daniel Peteranna of the South Uist Business Impact Group said that while there would be reservations over unbundling, it has not been investigated properly.

"Maybe we should say, give us the money and we can run it on our own," he said. "We do need more local control, as long as it did not affect any subsidy to run it.".

But he said the idea of keeping the status quo of CalMac was "unbelievable" and said the west coast ferry services should at least be open to tender, pointing to Serco taking over the Northern Isles routes running services between the Scottish mainland and the Orkney and Shetland islands.

The Western Isles council, Comhairle nan Eilean Siar has told ministers that while in the past sections of the community have been extremely concerned at any suggestion of the break up of the Clyde and Hebrides network, in recent years there was equal concern that the views of island communities are "not listened to by any of the central belt headquartered bodies which are responsible for our ferry service provision".

The authority has said there needed to be a "healthy discussion" on options for providing better ferry services, and has indicated that should not preclude the examination of unbundling, suggesting a Western Isles ferry bundle would be larger than the current arrangements for the Northern Isles contract.

The Western Isles Council, Comhairle nan Eilean Siar has told ministers that while in the past sections of the community have been extremely concerned at any suggestion of the break up of the Clyde and Hebrides network, in recent years there was equal concern that the views of island communities are "not listened to by any of the central belt headquartered bodies which are responsible for our ferry service provision".

The authority has said there needed to be a "healthy discussion" on options for providing better ferry services and it should not preclude the examination of unbundling, suggesting a Western Isles ferry bundle would be larger than the current arrangements for the Northern Isles contract.

A bundle could extend to six large ferries with two deployed to serve Stornoway; a dedicated ferry on each of the routes from Tarbert, Lochmaddy, Lochboisdale and Castlebay plus two smaller ferries to serve the Sound of Harris and Sound of Barra.

In other countries such as Norway ferry operator tenders are for single routes or for small bundles of routes in a specific geographic area, requiring the winning bidder to procure their own vessels.

It is estimated that Norway's ferry fleet runs to 200 vessels that deliver services across 120 ferry routes and carry 44m passengers each year.

A video of the ferry from Ullapool to Stornoway

Scottish Government-commissioned consultants Ernst and Young were to make recommendations through Project Neptune over a "potential route/structure for direct award of ferry services contract that Scottish ministers could consider as part of a future strategy".

The consultants were also asked to "include an analysis of the challenges and opportunities associated with options for decentralisation (unbundling of routes into smaller packages)."

But then transport minister Jenny Gilruith said in February that there are unbundling was not on the table.

A Transport Scotland spokesperson said: “Scottish Ministers have been clear that we do not favour splitting up the network or privatising any of the Clyde and Hebrides Ferry Services routes.

“We share the desires of island communities for sustainable and effective ferry services and look forward to continuing our constructive engagement with them on future services and vessel replacements. CalMac also engages with ferry users through the Ferries Community Board, chaired by an independent member of the community.

“The Scottish Government has invested more than £2 billion in our ferry services since 2007 and we have outlined plans to invest around £700 million in a five year plan to improve ferry infrastructure. Since May 2021, we have bought and deployed an additional vessel in MV Loch Frisa, chartered the MV Arrow and MV Alfred, commissioned two new vessels for Islay, progressed investment in essential harbour infrastructure, and now we are delivering a further two new Islay-class vessels.”

CalMac was approached for comment.