19 May 2016

Scottish Freight and Passenger Ferry Service Contract Awarded to CalMac  

Incumbent Operator Beats Off Serco Bid

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Shipping News Feature UK – One of the British government’s favourite contractors, Serco, has failed in its bid to wrest control of the Clyde and Hebrides Ferries freight and passenger services which will continue to be run by Scottish state owned Caledonian MacBrayne (CalMac). As we have reported previously the two bidders were vying for a new 8 year ferry contract which commences on 1 October.

In an all-out fight to retain the service CalMac was supported by the RMT Union which commissioned a report outlining the damage a switch of operator might cause and said Serco was dogged by ‘a litany of failure’. That company has just been fined for failures to pay bills and wages in a supply contract with Lincolnshire Council and CEO Rupert Soames has lately been in the press after the Prime Minister was accused of being in cahoots with him to support the Brexit campaign. On hearing the news RMT General Secretary Mick Cash said:

“This is a major victory for the union and a successful defence of the principle of public ownership and operation of lifeline Scottish ferry services. The Scottish Government has accepted the union’s arguments over the broader social and economic benefits of lifeline ferry services in the west of Scotland remaining in the public sector with CalMac. It is also a complete vindication of RMT members’ decision to take industrial action in June last year which secured meaningful employment and pension protections in the contract put out to tender by the Scottish Government in July.

”The union worked in tandem with the other CalMac unions and the STUC to defend and promote the public sector bid during this unnecessary and expensive tender process. This is a further source of encouragement for the future defence of public sector Scottish ferry services. Negotiations can now continue with CalMac on the CalMac Pension Fund and whilst the union is under no illusions as to the need for reforms to the governance structure at CalMac and ferry procurement policy, the fact that the bid from Serco was rejected should give all RMT members encouragement in the ongoing struggle against privatisation across the transport industry.”

The Scottish Labour and Green parties fully supported CalMac and many locals living on the islands, to whom the service is seen as a lifeline, were vociferous in their backing of Calmac and the status quo, whilst Serco, which operates the NorthLink ferries to Orkney and Shetland, came in for severe criticism from the Scottish MSP for the Highlands and Islands, David Stewart who said a transfer of contract to private providers ‘damages democracy and employment standards’.

The Scottish government said CalMac had committed to retaining its pension scheme, and to a policy of no compulsory redundancies. The successful bid included 350 commitments to improve the service, including a £6 million investment in vessel and port improvements. On announcing the decision First Minister Nicola Sturgeon said the renewal meant retention by Scottish Ministers of important issues including fares and timetables for services woven into the fabric of the island communities. She continued:

"Their tender offers a good deal for those communities served by these vital transport links and ensures that we can maximise the opportunities to support and nurture our island economies. CalMac will better manage demand to drive an increase in traffic, as well as make the ferry services more attractive with the introduction of smart ticketing on key routes."

CalMac managing director Martin Dorchester was clearly relieved and best pleased by the decision on a process which occupied both him and his management team for several months leading to the submission of the tender. He commented:

”I am absolutely delighted to announce that we have won the contract to run ferry services on the west coast of Scotland for the next 8 years. This announcement means that going forward we are the operator of choice for 2 contracts, the delivery of the Operations contract for Transport Scotland and the delivery of the Harbours contract for CMAL.

”We will now enter a period called the 'stand-still' period. The stand-still period is a period of 10 days following the notification of an award decision of a contract(s), before the contract is formally signed with the successful supplier. Its purpose is to allow unsuccessful bidders to challenge the decision before the contract(s) is signed.

”We are still covered by a confidentiality agreement with Transport Scotland. This means that we cannot provide any detailed information on what is contained within our submission during the stand-still period until we are formally released from the agreement. However, as soon as this legal period has passed we will be able to share more details around the commitments we have made in our winning bid. What we can say, is that the following key themes were integral to our bid submissions.

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