Serco to run ferries to Orkney and Shetland under £450m contract renewal

Outsourcing giant Serco has committed to a series of improvements on ferry services linking Aberdeen with Orkney and Shetland after being awarded a contract renewal worth at least £450 million in revenues.

Serco said it intended to build on the 'strengths and experience' gained over the past seven years of operating the NorthLink franchise. Picture: Simon Price/Firstpix

The group has been selected as preferred bidder to run the Northern Isles services for an initial six-year term, generating an estimated £450m in revenues. There is an option for the Scottish Government to extend the contract for a further two years, valued at an additional £160m.

Serco said it intended to build on the “strengths and experience” gained over the past seven years of operating the NorthLink franchise. The Scottish Government, meanwhile, pledged to freeze some fares for three years.

Key features and improvements outlined by Secro will include continuing to undertake the planned maintenance and dry docking of the vessels in Scotland, to ensure “strong levels of resilience”, and upgrades to the terminal facilities at Kirkwall in the Orkney Islands, as well as “enhanced passenger information systems” at all the terminals.

There will also be a new smart ticketing system introduced for foot passengers.

The group plans to roll out a new “demand analysis and forecasting model to inform and improve accuracy and confidence in passenger and freight requirements” and a new “green travel” campaign aimed at customers and employees, together with a carbon reduction strategy to cut emissions.

Serco chief executive Rupert Soames said: “We are very proud of our track record over the past seven years, during which time we have improved almost every aspect of the lifeline service for the communities and businesses of the Northern Isles, while also reducing materially the annual subsidy and thereby reducing the burden on the Scottish taxpayer.

“We look forward to further improving the service in the coming years.”

Islands Minister Paul Wheelhouse announced cabin prices would be reduced by 20 per cent between Aberdeen and both Orkney and Shetland.

The Government has also committed to freezing fares for passengers, non-commercial vehicles and cabins on those routes for the next three years.

Scottish Greens transport spokesperson John Finnie MSP criticised the renewal of the contract with Serco.

“I’m astonished that the Scottish Government has decided to maintain its relationship with such a disreputable company,” he said. “My constituents in Orkney and Shetland deserve a ferry service that is run exclusively in the interest of island communities, but instead the Scottish Government’s proposal will see a service run exclusively in the interest of private shareholders.”

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