ScotGov blocks plan to wrest control of ferry services from CalMac

But it has emerged that the project has collapsed after the Scottish Government refused to discuss the potential for a community enterprise to take over the operation of services between Oban and Mull.

Islanders launched the plan for a possible community takeover of ferry services from CalMac in November 2022.

It launched a feasibility study to look at community ownership of ferries in the wake of concerns over continuing disruption to services with an ageing fleet on the Clyde and Hebrides Ferry Service (CHFS).

The study looked at whether services could be run by the communities themselves as an alternative to what it calls the current monopoly controlled by Scottish Government-controlled bodies.

READ MORE: New fears for future of Ferguson Marine after ScotGov announcement

The group was assisted by ferry expert and author Roy Pedersen, who scoped out a new ferry service for Mull that could have doubled capacity, lengthened the operating day, and increased frequency dramatically – whilst reducing operating costs on the route by 30%.

But the group say that for such a venture to be possible, Scottish Government would need an open mind to the idea of allowing services to be put out to tender not as one single whole-network contract, but as a series of smaller bundles.

But the Herald can reveal that the office of transport minister Fiona Hyslop told the group that she could not prioritise a meeting to discuss the moves.

The group was told towards the end of last year: "Unfortunately, the minister's diary is very full and she regrets being unable to prioritise a meeting on a topic which is contrary to the Scottish Government's very clear position on not unbundling the CHFS contract".

When asked to reconsider in November, Ms Hyslop's office said: "The minister confirms that she will be unable to attend a meeting at this time to discuss the issue you raise, as previously indicated."

There has been concern that the services are “cocooned” inside four levels of Scottish Government control with the Transport Scotland agency as funders, the procuring and vessel owning company, Caledonian Maritime Assets Ltd (CMAL), the ferry operators Calmac and the now nationalised shipbuilders Ferguson Marine (Port Glasgow).

Joe Reade, chairman of the committee said: "We wanted to have a good-faith discussion around all of this with Fiona Hyslop. Rather than the grown-up discussion we hoped to have, we have simply been refused meetings. Twice. This is a government that champions the islands, and has been ground-breaking with the Islands Act and encouragement of community empowerment.

"A community ferry company is the very embodiment of those excellent policy aspirations – yet the Transport Minister refuses to even discuss it. “For some reason, the government seem determined to protect the CHFS monopoly come what may. They have never once offered a coherent argument in support of the monopolist status quo."

State-owned ferry operator CalMac is expected to get an uncontested contract for the beleaguered west coast services while ministers continue to rule out opening routes up to private operators.

Ministers have said a direct award to CalMac is the preferred option for the next contract over the future of lifeline ferry services.

A final decision after a due diligence process was expected by this summer.

Transport Scotland officials have been examining how to make the award without leaving itself open to legal challenges through a breach of the UK's version of the state aid rules.

The idea behind state aid rules is to avoid financial assistance given by a government that favours a certain company or commercial group and has the potential to distort business competition.

The First Minister Humza Yousaf has previously indicated that he wanted CalMac to get the job indefinitely.

However, the then wellbeing economy secretary Neil Gray ruled out ploughing further millions into the nationalised Ferguson Marine shipyard as part of a new business plan to secure a sustainable future quoting concerns over complying with UK subsidy control rules fearing it would left open to legal challenge.

The Competition and Markets Authority has previously warned about the "potential risks" of state control over the way ferries are operated, run and paid for in Scotland.

The MIFC point to the success of Norway as a model for what they aspire to. There, a multitude of ferry operating companies compete to operate public ferry services on a route-by-route basis.

The committee say the benefits are "difficult to deny as Norway has the World’s most comprehensive, efficient, and green ferry network in the world, and the cornerstone to that is route-by-route tendering".

If the MIFC plans had been allowed to develop, the expectation was that the community company would have procured its own vessels, rather than use those provided by the state fleet-owner, CMAL.

According to Roy Pedersen, “An efficient, productive and value-for-money ferry service is shaped by its choice of vessels.

"Again and again, over-complex, over-crewed, over-weight and over-priced monohulls are chosen. As these bloated ships get bigger and bigger, the subsidy CalMac needs has got larger and larger.

"There is a direct correlation. My advice to MIFC was that any community ferry company should choose simple, efficient, light and productive medium-speed catamarans – as exemplified by the Alfred on the Pentland Firth. With the right choice of vessels, a high-frequency, high-capacity and high-reliability service could operate between Craignure and Oban at minimal cost. As my assessment shows, it would need only a fraction of the public subsidy that [CalMac] currently demands.”

Mr Reade said: “We can see the vast waste and inefficiency of the CalMac system, and out of desperation, thought if Transport Scotland, CalMac and CMAL don’t recognise how much better things could be, then maybe we should show them. That’s what the community ferry idea was about – encouraging a debate with government, and trying to demonstrate that there were other ways of doing things."

A Scottish Government spokesman said: “Scottish Ministers have been clear for some time now that we do not favour splitting up the network or privatising any of the Clyde and Hebrides Ferry Services routes and this was a position supported by the cross-party Net Zero, Energy and Transport Committee in their own ferry report.

“We share the desires of island communities for sustainable and effective ferry services and look forward to continuing our constructive engagement with them on future services and vessel replacements. The then Minister for Transport visited Mull and met with Mull and Iona Ferry Committee in person last summer. There have been no discussion with SERCO for at least 10 years about the Hebrides service.”