£15m to give CalMac its routes back 'a disgrace'

The Herald (David Ross September 21 2007)

After eight years of controversy and more than £15m of public money, Caledonian MacBrayne yesterday secured the contract to run its own routes.
Opposition politicians condemned the long-running saga as a disgraceful episode, with the public purse paying a fortune to achieve the status quo.
The decision means that the company, which can trace its west coast ferry roots back to 1851, will have at least another six years transporting the communities it has served for a century and a half. But CalMac's subsidy to provide lifeline services on the Clyde to the Hebrides will increase from around £31m to £43m.
Though the Scottish Government points to increased pension and staff costs and new vessels as the reasons for the increase, it is also due to improvements in the service to islands such as Islay, Gigha, Mull, Coll, Tiree and Arran.
There was disappointment in South Uist where a service to Mallaig was sought, in addition to the long haul to Oban.
The previous Scottish Executive insisted that tendering was the only way to justify CalMac's subsidy in accordance with European regulations on state aid. That is disputed by experts who argued that the European Court's Altmark ruling in 2003 exempted clearly defined essential services.
The executive said Altmark was not relevant but earlier this year the European Transport Commissioner said that, as long as a ferry subsidy complied with the Altmark ruling, the subsidy "would not constitute state aid". But by then the routes had been put out to tender. From an original tender list of seven companies only three were invited to tender. They were CalMac, the ship management company V Ships and Western Ferries. In February last year Western withdrew and in January this year V Ships followed suit.
By that time CalMac had gone from one company to seven in a complex and expensive restructuring process deemed necessary for tendering. As a result CalMac Ferries Ltd (CFL) will now run the ferries but will pay Caledonian Maritime Assets Limited for the lease of its vessels (£10.4m in the first year of the contract) and use of its piers. That money will then go back to the Scottish Government.
In opposition the SNP had been highly critical and Stewart Stevenson, the Transport Minister, said yesterday: "I am aware of the strong feelings around the need for this tender, but completing the process was the quickest way to protect these vital services for those communities who depend on them."
Alex Johnstone MSP, the Tories' Shadow Transport Minister, said last night: "This whole sorry episode shames and disgraces the previous Liberal Democrat and Labour ministers who presided over years of chaos and delay since the tendering of these routes was first announced. And the net result today is that vast sums of taxpayers' money has been squandered merely to restore the status quo."
Meanwhile, CalMac said it offered to provide a service between Mallaig, Barra and South Uist using existing vessels and, in addition, to continue a link to Oban. But a spokesman for the Scottish Government said it would have meant a reduction in services or a new vessel costing £25m with running costs of £4m.
But Donald Manford, the Barra councillor who chairs the Western Isles Council's Transportation Committee, said: "It is extremely disappointing that the government appears not to have seen the value of the Lochboisdale- Mallaig route."