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Transport / Ferry contract set for another extension as CalMac launches legal action

Photo: NorthLink Ferries

STEPS are being taken to extend the existing Northern Isles lifeline ferry contract after state owned ferry operator CalMac confirmed it is taking legal action over a Scottish Government decision to award the next contract to current holders Serco NorthLink.

The move has been condemned by Northern Isles politicians, who have described the latest development as “quite incredible” and “deeply disappointing”.

Responding to a question in the Scottish Parliament on Wednesday morning, islands minister Paul Wheelhouse confirmed that the government has now formally been notified by CalMac Ferries.

It October it was revealed that CalMac had requested more information from the Scottish Government on how it came to pick Serco has the preferred bidder for the next Northern Isles ferry contract after claiming that it offered the best price.

Wheelhouse said the travelling public will not be affected by legal action, but Shetland MSP Beatrice Wishart said that previous delays in the awarding the contract have already undermined the public’s trust in the service.

“Procurement for the next Northern Isles ferry service contract has been hit by a number of unacceptable delays which does nothing to reassure people in the Northern Isles that the Government is committed to improving our lifeline ferry services,” she said.

“It is imperative that this dispute is resolved as soon as possible in the best interests of people in Orkney and Shetland.”

Her Orkney colleague Liam McArthur added: “It is deeply disappointing that CalMac has chosen to go down this route. It is not clear what the basis for the legal challenge is but communities in Orkney and Shetland will be appalled at this latest development.

“Island residents and businesses depend on these lifeline services. The letting of this contract has already been delayed by more than 18 months. Continued uncertainty over the future of the service is the last thing communities in Orkney and Shetland need.

Highlands and Islands Conservative MSP Jamie Halcro Johnston said it was “quite incredible” that the Scottish Government is being sued by one of its own quangos.

“It tells you everything you need to know about the mess the SNP government has made of ferry services that a publicly owned company wants to take it to court, leading to more uncertainty and delay for travellers,” he said.

“When factored in with the completely unacceptable delays with the two new ferries being built, the delays on reducing fares to Orkney and Shetland and its refusal to meet its pledge on fair funding for inter-island ferries this really is turning into a fiasco.”

Scottish Labour’s spokesperson for transport Colin Smyth said the government could have awarded the lifeline contract directly to a public sector operator but instead decided to re-tender it.

“This fiasco exposes the SNP’s mishandling of this lifeline ferry services contract,” he said

“Their incompetence and opposition to public ownership has led to the extraordinary situation we now have of a Government being taken to court by its own company.”

The Scottish Greens transport spokesman, Highlands and Islands MSP John Finnie said Transport Scotland appears not to have a handle on what is happening.

“The fact that the publicly owned ferry company is taking the government that owns it to court does not fill me with confidence, and certainly doesn’t suggest that Transport Scotland has a handle on what’s happening.

“Ironically, when the Scottish Government first announced that the contract would go out to tender, instead of awarding it to the public operator as Greens favour, they claimed they had done so to avoid the possibility of legal action.”

Wheelhouse told parliament that he was limited in what he was able to say so as not to prejudice the outcome of the legal proceedings.

He added: “I can confirm that Scottish ministers remain fully committed to the provision of safe, effective and reliable ferry services to the Northern Isles.

“On behalf of ministers, Transport Scotland are liaising with the current operator, Serco Limited, to make arrangements for the extension of the current contract to maintain continuity of service and to ensure full connectivity to and from the Northern Isles.

“This will mean that the local communities, passengers and businesses who rely on the services, and the staff who work on them, will not be affected by the legal proceedings and services will be run as normal throughout this period.

“The legal proceedings will not affect our recent commitment to fare reductions on the Shetland routes for islanders, including a 20 per cent discount on cabin fares and a three year fares freeze from January 2020 on the Northern Isles ferry services that builds on the existing 30 per cent discount for passenger and vehicle fares already enjoyed by islanders.”

The new £345 million ferry contract was due to start at the end of January next year after being delayed from 31 October.

That delay was down to a legal challenge from private Orkney operator Pentland Ferries over the level of subsidy included in the contract.