Row over extra £16m for Calmac ferries

Published on Saturday 7 October 2006 01:16

MINISTERS were strongly criticised yesterday for giving the state-owned ferry firm Caledonian MacBrayne £16 million for restructuring ahead of its routes being put out to competitive tender.

The award was revealed as CalMac's annual report showed it made an overall loss of 33.3 million in the year to March, which was offset by a deficit grant of 31.4 million.

Rising fuel costs, berthing dues and the company's pension deficit all contributed to the figures, the firm said.

The 16 million was awarded after CalMac was forced to split into separate entities to comply with European rules ahead of a tendering process for its Clyde and Hebridean routes.

A new operating company, CalMac Ferries, based at Gourock, was established last Sunday, covering the 400 pier and support staff. A separate company, Caledonian Maritime Assets, was set up on Tuesday to own the 31 vessels and some 30 terminals. And earlier this year, Caledonian MacBrayne Crewing (Guernsey) was set up for the ferry company's 800 sea-going staff so it could avoid paying National Insurance.

Fergus Ewing, the SNP's transport spokesman, said: "Given the whole point of tendering is to get best value for money, it seems that, if this 16 million is part of the cost of the tendering, then this particular tendering exercise represents worse value for money.

"It seems a colossal price tag for a horrendously complex tendering process which will end up costing the taxpayer a great deal more money without any increase in the quality or frequency of services or reduction in fares."

The Scottish Executive said the cash "provides the company with a sound financial basis to move forward given the change to future trading activities".

The annual report showed CalMac's passenger numbers fell by nearly 40,000 to 5.32 million, but commercial vehicles carried increased by more than nine per cent to 94,000. However, it said fuel costs rose by 3.7 million to 9.5 million, while pension costs increased by 4.1 million and staff costs rose by 2.4 million.

For the first time, the report showed route-by-route losses on services. The biggest loss maker was the Ullapool to Stornoway service, at 4.5 million, while the Oban-Castlebay to Lochboisdale route lost 3.7 million.