News / Ferry contract damages case to go ahead
A JUDGE has cleared the way for a Shetland shipping company to sue the Scottish government for millions of pounds over the award of the northern isles ferry contract worth £243 million.
Shetland Line (1984) Ltd claims that Transport Scotland breached tendering rules when they awarded the contract to the multinational service provider Serco in May 2012.
A lengthy hearing is expected to take place in the Court of Session in Edinburgh later this year, but no date has yet been set.
The government had tried to block the legal action on a technicality, but their argument was dismissed last week clearing the way for the case to be heard.
Out of six bidders, Shetland Line and Serco were the final two left in the running for the lucrative six year ferry contract when it was awarded on 4 May 2012 – a public holiday on which the local election results were announced.
Shetland Line immediately challenged the government’s decision saying that the tendering process had been fundamentally flawed.
They said the government had not made the contract specifications clear enough, so that the rivals were bidding for two different services.
Shetland Line were offering to provide two freighters all year round, while Serco were only offering one and a half cargo ships throughout the year.
They were also promising more sailings across the Pentland Firth during the summer than Serco.
Their legal challenge in May 2012 delayed the awarding of the contract to Serco for two weeks, when Lord Malcolm ruled that it was in the island communities’ interest for the uncertainty over the future of the service to be removed.
Shetland Line then waited until last summer before they lodged a legal action claiming around £400,000 compensation and millions of pounds in lost profits.
Transport Scotland tried to have the case thrown out of court on a technicality, but last week Lord Woolman ruled against the government in Edinburgh’s Court of Session.
Shetland Line has been providing a freight service to the northern isles for the past 30 years.
Serco run Scatsta airport in Shetland, but had little experience running ferry services prior to winning this contract. Their speciality is winning government service contracts in areas ranging from health to security.
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