ORKNEY is set to enjoy cheaper ferry fares – and potentially even more tourists – after a landmark legal case.
Plans for road-equivalent-tariff or RET fares to the Northern Isles were supposed to be in place by last summer.
Transport watchers expected Orkney – already overwhelmed with cruise ship traffic – to be hit by a tourist influx, just as Scotland’s west coast islands were earlier.
However, RET plans were delayed by a challenge to overall subsidies to the routes from a private operator.
Pentland Ferries, which believed the subsidies to the main publicly owned but privately operated Northlink ferry franchise were excessive.
The firm, one of just two private car ferry operators in Scotland, challenged the lawfulness of a proposed subsidy under a single public service contract on ferry routes between Scrabster, in Caithness, and Stromness on Orkney, along with Aberdeen to Kirkwall, in Orkney, and Lerwick, in Shetland, and between Kirkwall and Lerwick.
The firm, which operates its own ferry business between Gills Bay in Caithness and St Margaret’s Hope on South Ronaldsay,, in Orkney, first saw its challenge rejected by a judge at the Court of Session in Edinburgh earlier this year. It appealed against Lord Boyd of Duncansby’s ruling.
READ MORE: Experts demand action to solve Scotland’s ferry crisis
But yesterday three civil judges ruled that the appeal should be refused.
The firm, whose services are not subsidised, challenged the inclusion of the Scrabster route across the Pentland Firth within the contract and maintained that subsiding it threatened its competing business.
Its counsel, Mark Lindsay QC, earlier described the move as “an existential threat” to the ferry firm.
The Scottish Government invited bids for a new contract for the mainland to Northern Isles ferry links between Aberdeen, Kirkwall, Lerwick, Scrabster and Stromness which envisaged five ferries being deployed.
The estimated value of the subsidy for the contract over an eight-year period is £370 million. and
It is due to be awarded on August 2.
Bidders included Serco, which currently runs services, and CalMac.
Unions and the Labour party have backed a CalMac bid to effectively fully nationalise what are lifeline services.
Scotland’s senior judge the Lord President, Lord Carloway, said it was for the Scottish ministers to decide what would constitute an adequacy of service.
“If only the petitioners’ [Pentland Ferries] service operated, the respondents were entitled to
hold that the services across the Pentland Firth would be inadequate,” he said
“The market would fail to meet the demand.
“There would be insufficient service to meet a real public need, especially in the peak season and
if problems arose, for whatever reason, on the petitioners’ route,” he said.
The senior judge said the ministers were also entitled to take into account the advantages of the Scrabster crossing in terms of convenience as an alternative route.
Lord Carloway said “bundling” routes together was a recognised way of producing economies of scale and attracting operators.
He said it was not unlawful if it did not produce “undue market distortions” and it did not appear to do that.
READ MORE: Calls mount for lifeline Northern Isles ferry services to be fully nationalised
Lord Drummond Young, who heard the appeal with the Lord President and Lord Menzies at the Court of Session, said that at this stage the court had to rely on the ministers observing their legal obligations in a proper manner.
He said: “Provided they do so, any risk to the economic viability of the petitioners’ own ferry service should be kept as a minimal level or eliminated.”
An independent report by Ekosgen in 2017 urged Orkney Islands Council and Highlands and Islands Enterprise to look carefully at the impact of RET on visitor numbers in light of Hebridean experiences.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here