THE First Minister has insisted there are no plans to privatise lifeline ferry services to Scotland’s island communities.

Nicola Sturgeon also ruled out breaking up the CalMac ferry network amidst concerns about a possible “unbundling” of routes into smaller groups.

It raised concerns that the most lucrative routes will be sold off to private firms.

The denial came after the Herald revealed that global consultants Ernst and Young had been tasked by ministers to look into the "unbundling of routes into smaller packages" as part of options for "decentralisation".

This led to concerns over the future for state-controlled ferry operator CalMac.

The details emerged in a brief given to Ernst and Young for Project Neptune seen by the Herald  - which is examining the Scottish Government-controlled structure that underpins Scotland's ferry service.

Transport Scotland 'consultancy requirements' documents confirmed that Ernst and Young were tasked with looking beyond whether the structure is "fit for purpose".

There has been concern that the service is "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).

It asks the consultants to make a recommendation of a "potential route/structure for direct award of ferry services contract that Scottish ministers could consider as part of a future strategy".

It also ask the consultants to "include an analysis of the challenges and opportunities associated with options for decentralisation (unbundling of routes into smaller packages)."

It goes on: "Views are sought on whether corporate structures would allow direct award of contracts in future. However, no advice is sought on the merits of otherwise of that approach."

The First Minister made the statement after West Scotland MSP Katy Clark asked Sturgeon for the government to “make a commitment to keep ferry services in public ownership”.

The SNP leader told said: “We have no plans whatsoever to privatise public service ferries."

The Herald:

Sturgeon said that ensuring ferry services are delivered through public contracts gave them “control over service levels, timetables and fares” on the routes operated by CalMac on the Clyde and Hebrides routes and by Serco NorthLink to the Northern Isles of Orkney and Shetland.

The Scottish Labour representative, who who raised the issue at First Minister’s Questions, said she was pleased the Scottish Government “seems to have ruled out privatisation”, as she claimed a lack of investment in ferry services since the SNP came to power in 2007 had resulted in more than 1000 sailings being delayed because of mechanical issues in the past five years.

Ms Sturgeon replied: “I didn’t seem to rule out privatisation, I did rule out privatisation.

“Let me say it again. We have no plans whatsoever, we will not privatise our public service ferries and equally we have no plans to split up the CalMac network.

“That is the position of the Scottish Government.”

She told MSPs the SNP in government had “invested over £2bn pounds” in ferry services and infrastructure, with spending of £580m earmarked for the next five years.

The First Minister pledged: “We will continue to invest in our ferry network to give people in our islands the service the have every right to expect.”

Ten years ago transport minister Keith Brown said "no compelling case" had been made that "tendering individual routes or unbundling the current contract" would lead to greater benefits.

This was repeated by then First Minister Alex Salmond who told MSPs in 2012 that the "case for unbundling, in our estimation, has not been made".

The Herald:

At that time, there was concern that it would hive off CalMac’s four busiest routes, as suggested in a 2010 consultation on future ferry services.

The concerns were that the Ardrossan to Brodick on Arran, Wemyss Bay to Rothesay on Bute, Oban to Craignure on Mull and Largs to Cumbrae were to be split off as CalMac's contract expired the following year.

It comes as the state-owned ferry operator CalMac is having to handle an ageing ferry fleet with new lifeline vessels MV Glen Sannox and Hull 802 still languishing in the now state-owned Ferguson Marine shipyard, with costs of their construction more than doubling from the original £97m contract and delivery over four years late.