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Transport / And then there were two – FRS scraps ferries bid

Contract still faces EU challenge

Fares on passenger ferries the Hrossey and Hjaltland are to fall. Photo: Shetland News/Hans J Marter.

THERE are now only two companies in the running for the next Northern Isles ferry contract after one potential bidder pulled out.

International shipping company FRS has decided against submitting a tender for the £370 million contract, meaning that now only current operator Serco NorthLink and government owned CalMac are vying for the deal.

Minister for Energy, Connectivity and the Islands Paul Wheelhouse confirmed the news on Wednesday.

The contract, currently tendered by government agency Transport Scotland, will run for eight years and it will come into force at the end of October.

Wheelhouse confirmed that Transport Scotland received tenders from Serco and CalMac on 29 April.

“The third prequalifying bidder, the international ferry operating company Förde Reederei Seetouristik GmbH & Co. KG (FRS), decided not to pursue any further interest in the competition,” he said.

“Transport Scotland will evaluate bids received, with a view to having a new public service contract in place by 31 October 2019.”

SIC environment and transport committee chairman Ryan Thomson said it was “no great surprise” FRS had pulled out.

He added: “The council will now concentrate its efforts on the remaining bidders and will engage positively with both to make sure the needs of our islands are fully understood.”

The islands minister said that Transport Scotland will continue its engagement with the European Commission to “seek an early resolution to Pentland Ferries’ outstanding State aid complaint about the subsidies payable under the next public services contract”.

The private Orkney ferry company already failed in a legal challenge at the Court of Session in Edinburgh over the level of subsidy provided by the Scottish Government on the ferry contract.

But Pentland Ferries still has two outstanding complaints to the European Commission relating to the decision to tender the next Northern Isles Ferry Services contract and plans to introduce road equivalent tariff on the routes.