THE SNP Government is facing the “fiasco” of being sued by its own ferry company.

Connectivity and Islands minister Paul Wheelhouse today confirmed that the state-owned ferry operator CalMac had raised legal proceedings over a disputed £450m contract.

The Government said it would work to "maintain continuity of service and full connectivity to and from the Northern Isles".

CalMac is challenging a decision by Scottish Ministers to award the Northern Isles Ferry service to commercial rival Serco Limited in September.

READ MORE: SNP under fire over ferry services 

The government-owned firm lost out to what it claims was a more expensive bid, and began a form challenge process in October, putting the contract into “extended standstill”.

Serco has operated the service for the past seven years, and the contract would have extended it for an initial six year with an option for a two-year £160m extension

The contract covers the public service sea routes from the mainland to Orkney and Shetland, as well as shorter hops from Scrabster in Caithness to Stromness in Orkney.

CalMac has now escalated the process with legal proceedings, leading to the automatic suspension of the contract with Serco.

Asked about the situation while election campaigning in Midlothian, Nicola Sturgeon said: "It’s a legal process, so it’s not appropriate for me to comment on that, other than to say the Scottish Government is confident in our processes and will proceed on that as you would expect. But we’ll let the legal process take its course.”

READ MORE: CalMac Ferries hails huge profits hike after year of record passenger numbers 

Mr Wheelhouse revealed the development in a parliamentary written answer in a letter to the transport spokespeople of the other parties at Holyrood.

In it, he said: “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.”

“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.

“This will ensure that the 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.

“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.

Highlands & Islands Tory MSP Jamie Halcro Johnston said: “It’s quite incredible that the SNP is being sued by one if its own quangos. 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.

READ MORE: CalMac ferry breaks down one day after refit

“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.”


Labour highlighted a previous Scottish Government commitment to award contracts for lifeline ferry services directly to public sector operators where possible, only to give the Northern Isles service back to Serco.

The start of the new contract had already been delayed due to a separate legal challenge by Pentland Ferries.

Labour transport spokesperson Colin Smyth said: “This fiasco exposes the SNP’s mishandling of this lifeline ferry services contract.

“Their incompetence and opposition to public ownership has led to the extraordinary situation we now have of a Government being taken to court by its own company.

“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.”

Highlands Green MSP John Finnie added: “My constituents in the Northern Isles who rely on these lifeline services will 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.

"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.”

LibDem Orkney MSP Liam McArthur said: "It is deeply disappointing that CalMac has chosen to go down this route. It is not clear what the basis for the legal challenge is but communities in Orkney and Shetland will be appalled at this latest development.

“Island residents and businesses depend on these lifeline services. The letting of this contract has already been delayed by more than 18 months. Continued uncertainty over the future of the service is the last thing communities in Orkney and Shetland need.

“Ministers must do everything possible to resolve this dispute as quickly as possible”.

LibDem Shetland MSP Beatrice Wishart added: “Procurement for the next Northern Isles Ferry Service contract has been hit by a number of unacceptable delays which does nothing to reassure people in the Northern Isles that the Government is committed to improving our lifeline ferry services.

“It is imperative that this dispute is resolved as soon as possible in the best interests of people in Orkney and Shetland.”