RADICAL plans to scrap Scottish Government-controlled ferry operators and owners CalMac and CMAL to form one organisation are being described as "a non-starter" if the nation has ambitions to rejoin the EU.

A University of Glasgow analysis for the National Union of Rail, Maritime and Transport Workers (RMT) is supporting radical merger plans which has come as a result of an investigation sanctioned by ministers into the structure that underpins Scotland's failing west coast services.

The study authored by Prof Jeanette Findlay, Dr Dania Thomas and Paul Quigley says the merger would "reduce both co-ordination and communication costs as well as providing savings by removing the need for two separate tiers of management."

But key industry insiders have told the Herald that they believe the merger could not happen if an SNP-led government has ambitions for Scotland to become an independent country within the European Union because of state aid issues.

It was as a result of complying with European guidelines on state aid in maritime transport that competitive tendering was considered necessary over ferry services - and this led to the break up in 2006 of Caledonian MacBrayne to create two ferry bodies CalMac as the service operator and CMAL as the infrastructure owner and procurer.

READ MORE: CalMac chief 'can't get car on ferry' on route to meet angry islanders

It comes as the deadline for re-tendering the Clyde and Hebrides Ferry Services contract has now passed.

It is estimated to take at least 18 months to draw up specifications in the contract and to launch a tendering process for Clyde and Hebrides Ferry Services.

With the current contract expiring in September 2024, it is felt that Scottish ministers will now have to make a temporary extension to the existing contract operated by CalMac.

The Herald: Passengers wait to board the CalMac ferry, Caledonian Isles at  Ardrossan bound for Brodick on Arran. Photograph by Colin Mearns.

The proposal to merge the ferry owners and operators - who between them employ over 1700 staff has emerged from the Project Neptune probe which was last year scathing of the governance structure for the lifeline island ferry services.

One industry insider believed a merger was a "non-starter" with an SNP-led government that had ambitions for an independent Scotland to be within the EU.

"Merger, when you say it out loud sounds fine," he said. "But the legalities involved are so difficult in this.. "There is mountains of paperwork. It was a complicated legal process to split the company in the first place.

"Merging would be a complete waste of time and money if your ambition was to rejoin the EU. "

Sign up for the Scotland's Ferries newsletter and get extra analysis and information every week from Scotland's leading journalist on the issue.

Click here to sign up 👈

"The split happened because of the need to tender within the EU. It meant that they could tender the contract for the service, and that service would not threaten the public assets, in other words, the vessels and the ports and harbours."

Caledonian MacBrayne Ltd previously provided the majority of Clyde and Hebrides ferry services and owned the associated vessels and a number of the harbour facilities.

The company was wholly owned by Scottish Ministers with these services requiring an annual subsidy from the Scottish Government to maintain lifeline service levels.

But in order to comply with European guidelines on state aid in maritime transport, competitive tendering was considered necessary over ferry services.

The then Scottish Executive tendered the Clyde and Hebrides Ferry Services (CHFS) as a single bundle, with the exception of the Gourock-Dunoon service.

In recognition of the uniqueness of the fleet and in order to ensure a level playing field for all bidders, in October, 2006, Caledonian MacBrayne Ltd was split into two ferry companies - CMAL and CalMac.

This meant that Caledonian MacBrayne Ltd transferred its operations, but not its assets, such as the harbours, ports and vessels to a new company - CalMac Ferries.

CMAL, which remains owned by Scottish ministers continued to own the vessels, ports and harbours and was responsible for the open tendering process.

The insider said: "To make tenders more viable, and to meet European requirements the decision was made to take away all ownership issues form the tender - so that any operator would sign a lease, a charter for the CMAL vessels. That is an understandable maritime arrangement, and easier than someone trying to tender for the service and then as part of that owning the vessels and there is a perceived risk of letting other companies own the vessels, because they could do what they like with them.

"To re-merge, and unwind all the legal work is complicated. And if it is the stated policy of the SNP government to be an independent country within Europe, then CMAL and CalMac if it was ever merged would only have to be resplit."

The Herald:

The Operation Neptune investigation carried out by global consultants Ernst and Young said a merger of CalMac and CMAL had "potential for improved passenger experience in the longer term, once initial challenges of integration were overcome".

The study said that there would be "opportunities to achieve efficiencies in their operations", for instance over vessel maintenance."

It says the the new merged enterprise "could improve service delivery". The new company was given a name - CHFS Ferries Co.

READ MORE: 'New Highland Clearances' - CalMac to review strategy after island ferry chaos outrage

It comes as the RMT called on the Scottish government to commit to keeping CalMac ferry services in permanent public ownership when the current contract ends.

The union was meeting with MSPs on Tuesday evening to make the case for a 'People's CalMac'.

It will discuss the new analysis from the University of Glasgow's Adam Smith Business School which says that the re-integration of CalMac and CMAL should be "strongly considered".

The analysis said that the move to break up Caledonian MacBrayne Ltd in 2006 has led to "regular and repeated periods of instability for all stakeholders including the ferry users, the broader island communities, the workforce and the various local authorities both on the Scottish mainland and the islands".

 A Transport Scotland spokesman said:“We have committed to looking the structure of ferry governance in Scotland as part of Project Neptune to ensure the most efficient and best value arrangement is put in place. Engagement with key stakeholders on this, and the future of the wider ferry network in general, has already taken place. No decision has been taken on any outcome of Project Neptune and future decisions will naturally take into account any potential subsidy control or state aid issues.

“The current Clyde and Hebrides Ferries Services contract is due to expire in September 2024 and we are currently considering the most appropriate route for continuity of services. We will continue to review all options, in order to deliver safe and sustainable ferry services to island and remote rural communities while achieving value for money.

“No decision on the detailed requirements of the future arrangements has been taken at this point, but we will work with key stakeholders, including island communities and the trade unions, to ensure the most efficient and best value arrangement to deliver our key lifeline ferry services.”