Scottish government sued by CalMac over contract failure

The Scottish Government is being sued by its own ferry operator, after it was controversially refused a contract to run a service, in what has been described as a "ferry fiasco".

CalMac has initiated legal proceedings against the Scottish Government.

CalMac, which operates the majority of Scotland’s ferry services, has “raised legal proceedings” against the government after it missed out on a tender to run the Northern Isles services.

Despite a previous commitment to directly award contracts for ferry services to public sector operators where possible, the Scottish Government ultimately awarded it to private sector operators Serco.

CalMac, is part-owned by the government, and is already facing delays of two new vessels for its Clyde and Hebridean services, as they are being built by Ferguson Marine, the company the government has just nationalised after it faced collapse.

The news of the legal proceedings was revealed in a letter from SNP islands minister Paul Wheelhouse to opposition MSPs, in which he wrote: "Earlier today I answered a Government Initiated Question informing the Scottish Parliament that CalMac Ferries Ltd have raised legal proceedings on the Scottish Ministers’ decision that CalMac’s tender to operate the Northern Isles ferry services was unsuccessful.”

"As is required in such circumstances, the initiation of formal proceedings have resulted in the automatic suspension of the award of the contract to Serco Limited. On Scottish Ministers’ behalf, Transport Scotland are liaising with the current operator, Serco Northlink, to make arrangements for the extension of the current contract to maintain continuity of service and full connectivity to and from the Northern Isles."

Today Scottish Conservative Jamie Halcro Johnston said it was "quite incredible" that the government was being sued by its own quango.

"It tells you everything you need to know about the mess the SNP government has made of ferry services that a publicly-owned company wants to take it to court, leading to more uncertainty and delay for travellers," he said.

“When factored in with the completely unacceptable delays with the two new ferries being built, the delays on reducing fares to Orkney and Shetland and its refusal to meet its pledge on fair funding for inter-island ferries, this really is turning into a fiasco.

“People in the islands want assurances that these vital links will be secure and that improvements to the service will start to get underway. But with the SNP in sole charge of transport for more than 12 years, things just keep getting worse.

“This is what happens when you have a nationalist government completely distracted by the constitution.”

Scottish Labour's transport spokesman Colin Smyth accused the government of presiding over a "ferry fiasco”, which he said "exposes the SNP’s mishandling of this lifeline ferry service".

“Their incompetence and opposition to public ownership has led to the extraordinary situation we now have a government being taken to court by its own company," he said. "Meanwhile, communities who rely on these services have no certainty on what is going to happen to their lifeline services.

“This chaos could have been avoided if the SNP had followed through on their commitment to scrap the wasteful and confusing tendering process and directly awarded lifeline ferry services to public sector operators.

“The decision to award the contract to a private company which subcontracts to companies that do not pay the minimum wage, already raised serious questions about the SNP government’s decision, but now it seems their own company has no confidence in that process and SNP ministers have serious questions to answer.”

In his letter Mr Wheelhouse also adds that local communities, passengers and businesses who rely on the services, and the staff who work on them "can be assured that services will be run as normal throughout these proceedings".

He writes: "It should also be noted that the proceedings do not affect our recent commitment to fare reductions on the Shetland routes for islanders, which will proceed from 1st January 2020, as promised.

"Scottish Ministers are now limited in what we can say at this stage on the legal proceedings themselves, so as not to prejudice the outcome of those proceedings. I will, of course, keep

Parliament informed about further developments, as appropriate."

However Scottish Greens transport spokesperson John Finnie MSP said that his constituents in the northern isles would be "dismayed at the whole procurement saga".

"The fact that the publicly owned ferry company is taking the government that owns it to court does not fill me with confidence, and certainly doesn’t suggest that Transport Scotland has a handle on what’s happening," he said.

"Ironically, when the Scottish Government first announced that the contract would go out to tender, instead of awarding it to the public operator as Greens favour, they claimed they had done so to avoid the possibility of legal action

"I expect the Islands Minister to come before parliament as a matter of urgency, explain exactly what is going on and how my constituents will be affected by this protracted saga.”