Calmac gifted Clyde and Hebrides ferry contract without having to tender

The contracts for the Clyde and Hebrides ferries will be awarded to Calmac without going out to tender. Picture: Andrew Milligan/PA Wire

Scotland’s Transport Minister Humza Yousaf outlined the plans subject to satisfying European Union rules on state aid and a legal exemption allowing public contracts to be awarded to in-house companies subject to strict regulations.

Government-contracted ferries are tendered under European law. Public and private firms can bid, but unions representing ferry workers have claimed this pits the interests of staff and passengers against private companies looking for profit from vital routes.

In a statement at Holyrood, Mr Yousaf said: “It would be my intention to scrap future tendering processes and appoint the contract to Calmac directly.”

He said the decision on whether to directly appoint or tender the Northern Isles ferry contract will be made by the spring to allow 18 months for a tendering process under the existing contract operated by Serco Northlink, if required.

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Mr Yousaf said the paused tendering exercise on the Gourock-Dunoon service will now restart as soon as practical, since appointing it directly was not considered a “viable option” when considering future transport of vehicles on the route.

The Minster said his ferry procurement policy review, originally expected to be completed by autumn this year, would continue for further work on the governance arrangements required for a company owned by Scottish Ministers, such as Calmac, to be able to receive a direct award.

He said: “In setting out the implications for the three ferry service contracts, our priority is to ensure the provision of the best ferry services possible to our islands and remote rural communities, while ensuring value for money to the taxpayer.”

Conservative Jamie Greene said: “What we’ve heard today is that, despite over 18 months of intensive wranglings, the Government is no further forward in its pursuit of a policy to ditch open and transparent procurement of ferry services in favour of a strategy to directly award contracts to a government-owned entity, which effectively sews up future contracts - if given indefinitely - to Calmac.”

Mr Greene said the tendering process was vital to ensure operators were “kept on their toes” and to enable the Government to choose the best firm.

Labour’s Neil Bibby urged the Minister to build a case to “end the costly tendering process” and to consider an expanded contract in the Northern Isles to cover inter-island services and increased freight capacity.

Mr Yousaf said the recent Clyde and Hebrides tendering process had cost £1.1 million. He pressed Mr Bibby and his party colleagues to clarify if they would support the Scottish Government’s draft Budget if a concession was made on inter-island service funding.

RMT general secretary Mick Cash said it “is inconsistent to pursue direct award on the Clyde and Hebrides but not on the Northern Isles routes”.

He added: “We do not believe that passengers and communities on Orkney and Shetland are implacably hostile to public sector ferries, particularly when 2018 fare cuts will be subsidised by the taxpayer.”