Ferry procurement update

The Scottish Government intends to award ferry contracts directly to public sector operators in the future if certain criteria can be met and subject to the views of local communities, the Minister for Transport and the Islands has told MSPs.

An update on the on-going procurement policy review indicates that a direct award to an in-house provider, such as CalMac Ferries Ltd, would be possible if they are compliant with the Teckal exemption and EU state aid rules.

The policy review is continuing to assess the governance arrangements required for a company owned by Scottish Ministers to be in a position to receive a direct award.

This additional work means the following decisions have been taken on the Scottish Government’s three ferry operating contracts:

• The Clyde and Hebrides Ferry Services network will continue to be operated by publicly-owned CalMac under the terms of the recently tendered contract until 2024.
• The Northern Isles Ferry Services contract, currently operated by Serco NorthLink, will be extended until October 2019 and a decision on whether it would be possible to make a direct award taken in the Spring of 2018.
• The currently paused tender for the Gourock-Dunoon ferry service will be re-started as soon as possible, as this could potentially allow for a vehicle service to be reintroduced on the town centre route.

Minister for Transport and the Islands Humza Yousaf said:

“As we said at the start of this review process, it is the Scottish Government’s preference to directly award ferry contracts to an in-house provider, subject to the views of local communities and stakeholders.

“I’m pleased to say that the indications so far are encouraging, but Transport Scotland officials are still working on the potential impact of complex state aid requirements on making such an award. If I can satisfy the European Commission, it would be my intention to scrap future tendering processes for the Clyde and Hebrides Ferry Services contract and directly appoint CalMac.

“We will complete the policy review as soon as we can but, in the meantime, we have had to make a number of decisions on current ferry contracts that are coming to an end.

“In the case of the Northern Isles Ferry Services, we will extend the contract until October 2019 with a view to making a decision on future tendering in Spring 2018. As part of this process, we will take account of progress made on further consideration of the Teckal exemption and state aid rules.  We will also follow-up on our earlier engagement by writing to key local community stakeholders in order to build a better understanding of their preferences for the future approach to the procurement of their ferry services.

“We will get the current tender for the Gourock-Dunoon ferry service back under way, given our long-standing commitment and the local community’s desire for a vehicle-carrying service on the town centre route. The next stage will be the Invitation to Tender, which will be issued as soon as possible.

“Making sure our ferry services support our island and remote rural communities remains at the heart of this exercise. We will ensure that these iconic services continue to play a vital role for the people and industries that depend on them.”