Northern Isles ferries to be bought by ministers as contract extended

NorthLink's three ferries are to be bought for the taxpayer and operator Serco given an 18-month contract extension as ministers mull over the future of the service.

MV Hrossey, one of the three ferries to be bought by the Scottish Government. Picture: NorthLink

The move to acquire the vessels on the mainland to Orkney and Shetland routes, which are leased from RBS, was broadly welcomed.

However, the Scottish Conservatives said it must not be a precursor to a takeover of the route by the Scottish Government-owned firm which runs CalMac.

The MV Hamnavoe, MV Hrossey and MV Hjaltland will be transferred to Caledonian Maritime Assets Ltd (Cmal), which is also owned by ministers.

Cmal also owns CalMac's ferries and some of its ports.

The NorthLink vessels are 15-16 years old

BACKGROUND: Serco to takeover Orkney and Shetland ferry routes from NorthLinkTransport and islands minister Humza Yousaf said Serco's contract would be extended to October next year "to allow further progress to be made with the ongoing review of procurement policy for future ferry operating contracts".

The extension, which Serco said was worth £104 million, follows on from its original six-year, £350m contract, which started in 2012.

Mr Yousaf added: “This agreement to buy the three passenger vessels serving the Northern Isles is an excellent piece of business for the Scottish Government.

“Not only does it secure the future of the three vessels that had previously been leased, but it will also deliver savings to the public purse in the longer term."

NorthLink Ferries managing director Stuart Garrett said: “We have a positive history of working with Cmal and look forward to continuing to deliver this service with business as usual during the contract extension.

"The improvements that we have made to both the vessels and the on board offering over the past six years have made a real difference and 98 per cent of passengers surveyed have rated their overall experience as positive."

Serco said passenger numbers had increased by 8 per cent since it took over and vehicles by 20 per cent.

It highlighted that public spending watchdog Audit Scotland had reported last year that its annual subsidy for the service over the first four years had reduced by more than one third to £33.2 million.

The Scottish Conservatives feared ministers were preparing for the service to be switched back to previous NorthLink operator and CalMac owner David MacBrayne, which lost the contract to Serco in 2012

Transport spokesman Jamie Greene said: “Whilst I welcome the Scottish Government’s commitment to the immediate future of the ferry service, little detail is known about the long-term plans of the route.

“This must not simply be a precursor to bringing CalMac in to run the service through the back door.

"Any future operator must undergo a proper and fair tendering process to ensure passengers continue to be afforded a high-quality service."

Scottish Labour transport spokesman Colin Smyth said: “I’m glad the future of these ferries have been secured, but we need a broader strategy to expand and modernise our ageing ferry fleet, and ensure that these lifeline services are affordable.

"It’s time for the minister to make good on his pledge to secure lower fares for the Northern Isles, which the [Scottish] Government promised to do in the first half of 2018.”

Scottish Greens transport spokesman John Finnie said: “This is a welcome move. Rather than our vital lifeline vessels being leased from a widely discredited bank, the fleet serving the Northern Isles, like vessels on the Clyde and Hebrides services, will now be in public ownership."

BACKGROUND: CalMac wins ferry contract after rival bid ruled “non-compliant”