TRANSPORT minister Jenny Gilruth has indicated it will be "financially challenging" to fix Scotland's ferry fiasco by the end of the decade while the costs of the £1.4bn plan are expected to soar with inflation after many years of under-investment.
Scottish Government’s ferry procurement body, Caledonian Maritime Assets Limited (CMAL) has admitted that the costs of providing newer ferries and improving the port infrastructure will have gone up due to inflation.
The extra investment called for by CMAL does not include the final price over the delivery of long-delayed two new vessels for state-controlled ferry operator CalMac that are over five years late with the price quadrupling from £97m.
Since the SNP came to power in 2007, the average age of Scotland's lifeline vessels has soared from 17 years to nearly 26 years. Back in 1974 the typical ferry was just 13 years old.
READ MORE: Ferguson Marine did not bid for new ferries contract given to Turkey
The oldest in the CalMac fleet is is the Isle of Cumbrae which is 47-years old.
The investment plan has an aim to bring down the average age of the fleet to 15 years.
Ms Gilruth has that the inflationary impacts on the costs for providing ferries will have to be examined as a "matter of urgency" admitting that she was unaware of what that might amount to.
Asked about the new cost of getting Scotland's ferries up to scratch and whether CMAL would have enough money to do it, she said: "That's something we will need to consider because irrespective of portfolios and Scottish Government right now, the inflationary impacts of what we're able to do as a government are really quite dramatic. And it has limited our potential, I think, to create investment in lots of different parts of the transport network."
She added: "We have in the last financial year been able to leverage additional investment [for ferries], which I think is crucial to getting us to that reduction of the average age of the fleet, but I make no bones about it - this will be financially challenging for the government and of course the government has responded, and will respond in due course where we are able to prioritise those investments to meet the requirements of the plan."
CMAL chief executive Kevin Hobbs has previously admitted that investment in ferries and harbour infrastructure in Scotland has "not met the levels needed for many years".
He had stressed the need for the full £580m investment committed in an infrastructure investment plan running from 2021/22 to 2025/26. But he has also said that well over £700m further was needed in the following five years to deliver 21 new ferries and the port infrastructure required over the following five years.
READ MORE: Ferguson Marine: Ferry firm sanctioned twice over financial fails
Peter Timms, chairman of ferry operator CalMac warned the government in 2010 that ferry investment had been "slipping behind for decades" and produced an analysis which concluded that finance was urgently required on a longer term, regular basis "to just stand still".
Since his warning only five vessels have been launched to support the network, and only two are considered as major ferries. They are the 5626 tonne MV Finlaggan, built in Poland in 2011 and the 9058 tonne MV Loch Seaforth built in Germany and launched in 2014.
Before his warning vessels were being produced at a rate of one every 14 months. Afterwards ferries were typically being produced every 33.6 months.
Now Mr Hobbs says the £1.4bn needed is expected to run even higher because of inflation.
Ms Gilruth said: "It's also important to reflect that we have already leveraged £580m into ports and vessels.
"Of course, we will need to work with CMAL on mapping out what those inflationary impacts actually mean for the current fleet and the deliverables, which are absolutely key."
The transport minister also said that splitting up the west coast ferry routes into bundles with different firms competing to operate them was "not the answer" to improving the service.
It came after privately-run Pentland Ferries said that the move would “dramatically improve the service provision”.
Ms Gilruth said: “Unbundling is not an option favoured by the Scottish Government. If I thought unbundling would be a silver bullet, I think it would be on the table. I’m not necessarily sure it is.
"I am not clear, given the variety of different routes and variety of different vessels we have within CalMac, that unbundling would work.
"I think it’s really important that we concentrate on delivering a better service across the network. It could also potentially be a distraction from that focus on improving resilience and reliability.”
Ms Gilruth said the move would not be considered as part of the Scottish Government’s review of how ferry services were organised.
She said: "We won’t be re-opening that question as part of Project Neptune. I don’t think that unbundling would provide us with the answers that we need here.”
CMAL has admitted that there had been issues in finding ferries for use in Scotland through the second hand market.
But in the past year securing two second-hand vessels to support the scheme were said to have been "unsuccessful". Ms Gilruth said: "So securing that additional second-hand tonnage is difficult in a competitive market. It remains challenging, but commercial discussions remain ongoing.
READ MORE: Ferguson Marine: Ferry firm faces being dissolved over finance fails
"By the end of this Parliament in 2026... we expect to have delivered six new major vessels and expect the small vessel replacement programme to be well underway.
"Clearly, we now have to reform how ferry services are delivered in Scotland but with that guiding principle that our island communities have to be part of what comes next."
CMAL buys the ferries and then leases them to state-owned CalMac, the operators who for 170 years have provided islanders' key link to the mainland, with in many cases the only one.
The costs will help to deliver the building of 21 new vessels for the fleet as concerns continue to emerge about the ageing ferry fleet in the wake of a series of breakdowns.
Seven of these will be loch-class vessels, built through the Small Vessel Replacement Programme (SVRP) which is already underway.
They are also planning to replace six major vessels in the fleet, the firt of those is being built to serve Islay and Jura.
The £105m deal for two lifeline vessels to serve the Kintyre to Islay route went to Turkey.
A further two lifeline ferries have also been contracted to be built in Turkey.
After 1973, when the Caledonian Steam Packet Co. acquired most of the ferries and routes and began joint Clyde and West Highland operations under the new name of Caledonian MacBrayne, the official expected life of a ferry had been 20 years.
CMAL, which owns the ferry network, and commissions new vessels has previously insisted well maintained ferries can operate safely for 40 years.
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 hereLast Updated:
Report this comment Cancel