Puffer firm finally runs out of steam

Government

THE last of Scotland's west coast puffer companies, whose bulk cargo

vessels provided an economic lifeline to many parts of the Highlands and

Islands, finally ran out of steam yesterday.

The closure of Greenock-based Glenlight Shipping Ltd -- which warned

last year that its future was threatened unless the Scottish Office

invested more in supporting the services -- brings to an end a

150-year-old seafaring tradition and has prompted accusations from

Opposition parties that the Government has an ''abject disregard'' for

the people of the Highlands.

The firm, whose fleet of three coasters and two barges supplied some

of the most remote parts of Scotland with coal, salt, and building

materials, has warned that its withdrawal will inevitably have an

adverse effect on the economic and social conditions of many communities

and claims that alternative shipping companies will not compensate for

the withdrawal.

As expected by most observers, Glenlight Shipping's parent company,

the Clyde Shipping Company, whose origins date back to 1815, announced

yesterday that its board of directors had decided with regret that it

could not continue investing private capital to support a public

service.

Glenlight Shipping, which had been seeking an improved subsidy package

for three years, has criticised the role of the Government in its demise

and claims that the Scottish Office has ''dumped'' the company despite

earlier assurances that it was committed to supporting the services and

independent examinations which showed it to be the most efficient bulk

shipping company they subsidise.

The Scottish Offices's Industry Department recently agreed to raise

from #350,000 to #500,000 the amount Glenlight Shipping could claim

under the Tariff Rebate Subsidy (TRS) -- which is designed to make

lifeline services more viable -- but refused to give a #625,000 deficit

grant to cover anticipated losses on the grounds that other shipping

operators would take over if the company withdrew.

It has been claimed by the Friends of Scottish Ferries Group that the

Scottish Office has already identified four prospective operators --

Gardner Shipping (Scotland) Ltd and Easdale Island Shipping Co., both of

Oban, Cunninghams of Stornoway, and Dennison Shipping of Orkney.

The Industry Department also pointed out that a review into the whole

issue of support for shipping services was being carried out by the

Scottish Office and that it would be inappropriate in advance of its

conclusions next month to give Glenlight Shipping a commitment to

additional funding which would involve a major change in present

arrangements.

Western Isles Islands Council has not surprisingly greeted news of the

closure with considerable alarm and claimed yesterday that the

alternative of transporting freight by road across the mainland and by

Caledonian MacBrayne ferry will cost significantly more than at present,

and will add to the cost of living and put more financial pressure on

local businesses due to increasing costs of raw materials.

The council is also seriously concerned that an increase in commercial

traffic on the ferries will adversely affect the availability of places

to tourist traffic, particularly at peak periods, and damage road

surfaces.

Council convener, Mr Donald Macleod, said: ''The increased costs that

will result from the alternative means of transporting these essential

goods will be an additional burden on an already fragile economy.

''If you add these extra costs to the airport tax proposed in the

Budget for October this year and the forthcoming increases in petrol

prices, living and working in the Western isles will become very

expensive indeed.''

The Scottish Office is likely to come under some pressure to justify

its position on freight services from Opposition voices such as Labour's

transport spokesman Brian Wilson, who said yesterday that he was

suspicious that it had what he called a ''wider strategy.''

Mr Wilson has written to Mr Lang concerning a claim by Glenlight that

they were told before the closure announcement that the level of Tariff

Rebate Subsidy was to be cut in 1994 from 40% to 30%, with the result

that charges would rise by 17%.

He said: ''If this is true, the issue goes a lot wider than Glenlight.

Such an increase in charges would force large quantities of freight away

from these bulk carriers, thereby threatening the viability of other

operators.

''If this is so, it would look as if there was a deliberate strategy

of running down the bulk freight capacity to the west coast islands. Why

should this be? It is difficult to avoid the conclusion that it is

related to the Government's review of Caledonian MacBrayne's future.''

Other Scottish Office critics believe there are a number of questions

Mr Lang must answer on matters such as the operators he claims will

provide similar freight services to Glenlight's.

Mrs Ray Michie, the Scottish Liberal Democrat Spokeswoman and MP for

Argyll and Bute, questions whether any other companies have the

specialist equipment and cranes which allowed Glenlight's vessels to

deliver cargo to many islands which have no unloading equipment.

She said: ''I would also like to know whether Caledonian MacBrayne

would receive the Tariff Rebate Subsidy were they to carry the road

vehicles which will inevitably take up some of Glenlight's business. Was

Caledonian MacBrayne involved in lobbying against deficit financing for

Glenlight?''

Mrs Michie said that, if the answer to both questions was yes, some

people may suspect that this decision is indeed part of a strategy to

fatten-up CalMac for privatisation. ''If this is the case, it is wholly

intolerable,'' she added.

Meanwhile, Glenlight Shipping claims that, given the way it has been

treated by the Scottish Office, a rush of companies seeking to replace

them is unlikely.

Asked about future freight services to the Highlands and Islands, Mr

Alex Fawcett, Glenlight's managing director, said he believes some work

will go to CalMac but forecast that a significant proportion will be

gained by foreign companies.

''Road salt which currently comes from Northern Ireland will not be

taken on a convoluted route via ferry to Stranraer and by lorry up the

Scottish mainland before loading on to another ferry,'' he said. ''It is

more likely that German or Moroccan salt will be shipped to a central

point at Inverness or Invergordon.''