OBAN – 17Th FEBRUARY 2009

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Scottish Ferries Review Consultation Document Appendices

10 June 2010

Contents

Appendix 3: List of Reports ...... 1 Appendix 4: Relevant TICCC recommendations to be addressed ...... 2 Appendix 5: High Level Scope ...... 5 Appendix 6: Members of the Project Groups...... 13 Appendix 7: Report on First Round of Consultation Events ...... 16 OBAN – 17th FEBRUARY 2009 ...... 16 GREENOCK – 23rd FEBRUARY 2009...... 21 LERWICK 26th FEBRUARY 2009...... 30 BARRA – 9th MARCH 2009 ...... 38 BENBECULA – 10th MARCH 2009...... 44 STORNOWAY – 11th MARCH 2009 ...... 51 TARBERT – 12th MARCH 2009...... 64 KIRKWALL 18th March 2009...... 66 INVERARAY 25th March 2009 ...... 72 ISLAY 31st MARCH 2009...... 79 TIREE – 1ST APRIL 2009...... 84 THURSO – 19th MAY 2009...... 86 MALLAIG – 11th JUNE 2009...... 87 KNOYDART – 6TH OCTOBER 2009...... 90 WYRE – 24th NOVEMBER 2009 ...... 92 GRAEMSAY – 25th NOVEMBER 2009 ...... 93 Appendix 8: Data Collection...... 96 Appendix 9: The Historical context...... 100 Appendix 10: Defining Routes and Services ...... 105

Appendix 3: List of Reports

Scottish Government Ferry Review, Work Package 6, Vessels, CMAL, 4/3/2010 Scottish Government Ferries Review, Accessibility Work Package, CMAL, 10/02/2010 Ferry Review, Port Infrastructure, CMAL, 22/01/2010 Scottish Ferries Review, Review of Scottish Ports Hosting Lifeline Ferry Services, CMAL, 23/12/2009 Scottish Ferries Review, Economic Work Package, Reference Economic Consultants, February 2010 Scottish Government Ferries Review, Cost and Affordability, MVA, March 2010 Scottish Government Ferries Review, Fares, MVA, March 2010 Scottish Government Ferries Review, Funding, MVA, March Scottish Government Ferries Review, Report on Routes, Services and Integration, MVA, March 2010 Scottish Government Ferries Review, Freight, Pantrak, 29/01/2010 Scottish Ferries Review, Direct Employment and Income Impacts of Ferry Services, Reference Economic Consultants, March 2010 Scottish Ferries Review, Report of Consultations with Coach and Tour Operators, Reference Economic Consultants, May 2010 Scottish Ferries Review, Direct Employment and Income Impacts of Ferry Services, Reference Economic Consultants, May 2010 Scottish Ferries Review: Consultation, Strategic Environmental Assessment: Environmental Report, Scottish Government, June 2010

Appendix 4: Relevant TICCC recommendations

The following is quoted from the Transport, Infrastructure and Climate Change Committee’s (TICCC) report on ferry services in Scotland. Reference is made to an ongoing EC Investigation which is now concluded. Recommendation Four: All of the proposals identified for improving ferry services in the long term, noted by the Committee in this report, should be fully assessed by the Scottish Government as part of the review. These proposals have been discussed earlier in this report and include— • The potential for introducing new vessels, including proposals such as— o faster and more fuel-efficient vessels o the use of catamarans o replacing large single ferries with two or more smaller ferries o leasing vessels rather than constructing them o streamlining the process for constructing new vessels • The potential for new thinking on timetable changes, such as extending sailing to the early morning and later evening, more frequent sailings and improved sailing times in winter • The scope for new routes, including proposals such as— o whether new ferry routes should be introduced o reconfiguring the ferry network in the Clyde and Hebrides in a more effective way • The scope for alternatives to existing ferry routes such as— o the ‘island bridge’ concept o fixed links • The need to invest in port infrastructure to bring it up to the required standard • The potential for new arrangements for crewing ferries in order to deliver better and more flexible ferry services • The scope for building more flexibility into future contracts between the Scottish Government and ferry operators, to ensure that services are responsive to the needs of users. Recommendation Five: All of the suggestions made above must be assessed fully by the Scottish Government, conclusions reached and then published regarding their viability. The Scottish Government should clearly state whether it intends to take them forward and, if not, why not. These proposals should be considered together, not on a piecemeal basis. This is because so many of the issues are 2

interlinked. It is vital that a coherent overall strategy for ferry services is developed. Recommendation Six: The review should outline how the Scottish Government proposes to address the constraints which have, in the past, prevented the delivery of improved ferry services. As a starting point, the Committee recommends the following action— Clearer leadership in developing ferry policy, articulated and driven by one body, the Scottish Government A more streamlined process which makes it easier for ferry operators to make changes to services within their contracts, if they are designed to promote improved services and facilitate innovation. The new arrangements should contain appropriate safeguards for communities’ lifeline services. Recommendation Seven: One of the key features of the review should be an exercise to consider the transfer to a new maritime division of Transport Scotland, the responsibility for the future strategic direction of ferry services, the development of gaps in the market, and the strategic management of CalMac Ferries, NorthLink Ferries and CMAL. Note: In his response to the TICCC, the Minister for Transport, Infrastructure and Climate Change did not agree to take this recommendation forward Recommendation Eight: A decision on the way forward for ferry services in Scotland should be clearly articulated in a document published following the completion of the review. This document should be the subject of a parliamentary debate and scrutiny by this Committee. The document should contain full information on how any proposals will be funded, the timescale for implementing change and the body or bodies to be charged with delivering change. Finally, the document should state how its proposals will take account of any decision reached by the European Union following its investigation into subsidies to CalMac Ferries and NorthLink Ferries.

Future arrangements for complying with EU law

285. The Committee has also heard suggestions that the EU may favour a solution whereby an independent ferries regulator is appointed, and the Committee considers that this proposal may have some merit. The Committee would also expect this issue to be considered as part of the Scottish Government’s ferries review.

Note: In his response to the TICCC, the Minister for Transport, Infrastructure and Climate Change said he would consider this following the Scottish Ferries Review.

288. In relation to competition more generally, the Committee believes that it is right and proper that, whenever possible, the private sector should be given fair opportunity to provide ferry services, whether through participation in tender exercises or through identifying commercial opportunities independently. It also considers it important that the Scottish Government’s review of ferries should properly recognise and take into account the current and future role of the private sector. The Committee therefore recommends that the review includes a full and genuine assessment of the opportunities that may exist across the ferry network for routes to be operated on a commercially viable basis.

Challenges facing smaller operators

293. The Committee recommends that the Scottish Government responds to the concerns expressed by the Isle of Skye Community Interest Company regarding the burden placed on it by these regulations to see whether a solution can be reached. The Committee further recommends that the Scottish Government ensures that its forthcoming ferries review includes an examination of the particular challenges faced by small ferry operators with a view to developing solutions to their particular needs.

Appendix 5: High Level Scope Current policy

Enhancing Scotland's ferry services and related infrastructure are key to supporting business and employment opportunities in pursuit of a wealthier and fairer Scotland. Achieving change in travel patterns and mode is one of the greatest challenges in securing sustainable economic growth and is integral to securing a greener Scotland. Connectivity also plays a key role in building safer and stronger communities. Safer and stronger communities are fundamental to the attractiveness of Scotland as a place to live and work. The current policy for delivering lifeline ferry services in Scotland is detailed in Delivering Lifeline Ferry Services: A consultation paper on meeting European Union requirements (2000). The policy objectives are to ensure “the maintenance of affordable sea links to Scotland’s island communities” and to improve “the level, quality and cost-effectiveness of services to remote island and rural communities.” The specific aims are to: • “Ensure the provision of a suitable standard of transport connection in terms of quality, frequency and capacity, to island (or in some cases remote peninsula) communities which would otherwise suffer social and economic disadvantage; • Ensure ferry fares and freight charges are not excessive; • Ensure that ferry services are delivered efficiently; and • Ensure that the necessary level of service is provided for the minimal amount of public subsidy.” In the years since this policy statement, the policy has been re-confirmed and no significant changes have been made to this policy position. However, it is clearly essential that Scottish Government action to deliver these aims should comply with the relevant EU legislation on State aid for maritime transport services. The ferries review will therefore reflect the outcome of the current EC investigation into subsidies to CalMac and NorthLink for maritime transport services in Scotland. Accordingly, and within the constraints of the relevant EU legislation that we expect will be clarified by that investigation, the ferries review is a chance to provide a ferry service that will achieve more balanced growth across Scotland, to give the most remote areas of Scotland the chance to contribute to, and benefit from, sustainable economic growth and therefore give them the chance to succeed. Reason for the review In Scotland’s National Transport Strategy (2006) a commitment was made to conduct a comprehensive review of lifeline ferry services, “to develop a long- term strategy for lifeline services to 2025. The review will include a detailed appraisal of routes to determine whether a better configuration could be developed in response to calls for new and faster connections serving those isolated communities and a review of fares structures as part of a broader review of the affordability of public transport.”

This commitment was reinforced in the Clyde & Hebrides Ferry Services: Draft Service Specification: Consultation Response (2006). The response stated that views offered during the consultation exercise would be considered in shaping the final remit of the review of lifeline ferry services. The issues identified for possible inclusion were timetables, services, fares, integrated transport, parking problems, enhancing tourism, economic impacts, overland routes and vessels. All of these issues have been considered for the proposed scope. The Transport Infrastructure and Climate Change Committee (TICCC) during their inquiry into ferry services in Scotland made specific recommendations regarding the review and during his appearance before the TICCC on 3 June 2008 the Minister for Transport, Infrastructure and Climate Change made various commitments in relation to the review. Purpose of the review The purpose of the review is: • To develop a shared vision and outcomes for lifeline ferry services in Scotland, in the context of the Government’s Purpose, Economic Strategy and National Transport Strategy. • To analyse the current lifeline ferry services and network, identifying how well it meets the proposed outcomes and how it links to other modal networks. • To inform the Scottish Government’s long term strategy for lifeline ferry services in Scotland in time to feed in to the next spending review, and influence the next round of procurement of ferry services and supporting infrastructure. • To identify policies to be taken forward to deliver the long term strategy, including the planned investment framework. General requirements The review will be conducted within the context of what is technically, financially and legally possible. Although it has been stated that the ferries strategy will be written to 2025, the Strategic Transport Projects Review is written to 2022. We therefore propose to write the ferries strategy to 2022 to keep the timing of the transport strategies aligned. We propose to include all publically funded ferry services in the review. This includes those services funded by the Scottish Government and those funded by Local Authorities. We will engage with COSLA and with the appropriate Local Authorities. The review will also take cognisance of the commercial services provided. The review will consider the current position as well as considering what changes need to be made to meet needs into the future. The needs of passengers, cars, commercial vehicles and freight will all be considered. The review will define our objectives in providing support to ferry services and clarify the criteria under which Scottish Government may fund particular services. 6

Methods of Delivery and Operation In light of the National Conversation, we will consider the structures and powers required to help us deliver ferry services more effectively. We will consider the correct split of responsibilities between Scottish Government, Local Authorities, operators and CMAL. Economic impacts The review will identify where changes and improvements to ferry services can enable the creation of dynamic and growing economies for our island and remote rural communities. The long-term strategy for lifeline ferry services will seek to reduce the disparity between the regions of Scotland, providing choices, opportunities and prosperity for businesses and individuals within our island and remote rural communities. Enhancing Scotland's ferry services and related infrastructure are key to supporting business and employment opportunities in pursuit of a wealthier and fairer Scotland. Achieving change in travel patterns and mode is one of the greatest challenges in securing sustainable economic growth and is integral to securing a greener Scotland. Connectivity also plays a key role in building safer and stronger communities. Safer and stronger communities are fundamental to the attractiveness of Scotland as a place to live and work. The ferries review is a chance to provide a ferry service that will achieve more balanced growth across Scotland, to give the most remote areas of Scotland the chance to contribute to, and benefit from, economic growth and therefore give them the chance to succeed. The review will make recommendations regarding where investment should be focussed to make connections for island and remote rural communities better, improving reliability and journey times, seeking to maximise the opportunities for employment, business, leisure and tourism, and promoting social inclusion. Safety Improve safety of journeys by reducing accidents and enhancing the personal safety of pedestrians, drivers, passengers and staff. Funding, Cost and Affordability The review will consider different funding mechanisms for ferries and will consider how affordable lifeline ferry services are to the Scottish Government and the public in the context of affordability of public transport more generally. The review will consider the cost of ferries with the preliminary findings on high cost items such as ports and vessels being fed in to the spending review anticipated in Spring 2009. The detailed costing work will be carried out once the review has concluded and the strategy has been agreed. Procurement The review will include how lifeline ferry services should be procured. It will consider among other things; appropriate legislation and regulations, the use of PSOs and PSCs, how the routes should be bundled together, the need for a tendering system in future and flexibility in contracts.

Services and routes Generally, the review will seek to improve reliability, journey times and connections. The review will consider the configuration of lifeline ferry routes that is needed in the future. This will include consideration of new routes and reconfiguration of existing routes. It will consider new and faster connections to serve the isolated communities. The level of service required on the proposed routes will be considered. We will consider proposals such as extending sailing to the early morning and later evening, more frequent sailings and improved sailing times in winter. As part of this, we will consider the impact of alternative arrangements for crewing ferries. Alternatives to ferry crossings such as tunnels, bridges and causeways will be identified. Detailed work to consider whether an alternative on any particular route is appropriate will be done after the initial review, once the overall strategy has been agreed. Specific routes As a general principle, no potential routes will be excluded from the review. A shorter route from Jura to the mainland will be specifically considered as the Minister for Transport, Infrastructure and Climate Change committed the review to including this at his TICCC appearance on 3rd June 2008. Competition The review will consider opening routes up to competition from commercial providers. It will test whether the continued bundling of routes is the correct way forward. Fares The review will consider the scope for rationalisation of fares structures and whether through fares adjustments we could provide greater support for particularly vulnerable island communities. We will take into account the early information available from the RET pilot. Vessels The review will consider what vessels would be required to support the routes and services recommended by the review, what vessel replacement is required and future investment requirements more generally. The review will consider the potential for introducing new vessels, including proposals such as: • faster and more fuel-efficient vessels • the use of catamarans • replacing one large ferry with two or more smaller ferries • leasing vessels rather than constructing them • streamlining the process for procuring and constructing new vessels

Ports and Harbours We will harness the opportunities that our geography provides through investment in our ports and harbours, enabling sustainable economic growth for our island and remote rural communities. The review will consider what investment is required in port infrastructure to bring it up to the required standard. This will be in the context of supporting the routes and services recommended by the review and will include how ports and harbours should be funded and run. Accessibility We will involve the PTUC or MACS in our steering group, to provide the views of disabled users of ferry services. We will identify scope for bringing existing ferries and infrastructure up to modern standards wherever possible. We will conduct an Equality Impact Assessment on the long-term strategy for life line ferry services in Scotland. Environmental issues Issues such as global carbon emissions, local emissions, global warming and fuel (availability, costs and alternative types) will be included in the review. We will consider the need for a Strategic Environmental Assessment. Integration The principle of integration of routes with other modes of transport will be supported as part of the review. Lifeline air routes The interaction between lifeline ferry services and lifeline air services will be included as part of the review. Freight We will take account of the action in the Freight Action Plan 2006 which states that: “In its review of lifeline ferry services in the Highlands and Islands, the Scottish Government - in partnership with Regional Transport Partnerships - will take full account of the freight requirements of businesses and communities. This will lead to targeted service enhancements and revised fare structures within the next tender period.” The recently awarded Northern Isles lo-lo freight contract will be included as part of the review. Exclusions As well as detailing what we will include within the scope of the review, it is important to be clear about what will not be included. The issues to be excluded until the review has concluded and the strategy has been agreed are laid out below. • The detailed work on timetabling. • The detailed costing work. • The detailed work to consider alternatives to ferry services.

• Detailed working on improving integration by making journey planning and ticketing easier and working to ensure smooth connection between different forms of transport. • The Clyde & Hebrides Ferry Services: Draft Service Specification: Consultation Response (2006) identified parking problems for possible inclusion in the ferries review. Issues such as parking problems will be picked up when the policies being taken forward as part of the long tem strategy have been agreed. • The issue of whether there should be a Ferry Regulator. As previously discussed with the Minister, we would like to consider this in the context of the agreed ferries strategy so will consider the need for a Ferry Regulator after the review has concluded. Consultation We will liaise and consult with operators, users, local communities and local authorities. This will be done via: • the groups set up as part of the project management structure • on board surveys with passengers. These will be conducted during the Summer season in order to capture the tourist users. • workshops with island and peninsular communities • surveys of island residents After the review is concluded and the proposed strategy has been agreed by Ministers, we will publish the proposal in the form of a public consultation document. It is envisaged that the public consultation will be web based and will be carried out between June and August 2009. All recommendations made by the TICCC report will be included in the published document and it will clearly state what assessment was carried out, what conclusions were reached and why. Review of existing material We propose to undertake a comprehensive literature review. There are a number of existing and planned studies being undertaken which relate to lifeline ferry services in Scotland. In addition there are a large number of research papers that have already been published which give particular perspectives on aspects of lifeline ferry services. We will take into account the substantial body of evidence that was received as part of the Transport, Infrastructure and Climate Change Committee’s inquiry into Ferry Services in Scotland. We are aware of studies currently being undertaken on the Mallaig – Lochboisdale route and through the Oban hub. We will ensure that any information available as a result of these studies is fed into the review. Project Management We propose to set up a Project Group, Project Board and Steering Group. The Project Group will be tasked with delivering the different pieces of work that make up the review. The Project Board will be made up of senior internal representatives and will oversee the project. The Steering Group will include 10

internal and external representatives and will advise Ferries Division on key aspects of the review. The Stakeholder Group will consist of all those with an interest in the review. We will seek to build on the new ferry consultation arrangements led by Hitrans. There will also be a stakeholder group, consisting of all those with an interest in the review, who will be kept informed of progress and be consulted as required. There are a number of policy areas within the Scottish Government which will have an interest in the ferry review. These include other transport policies, rural policy development, initiative on the edge, enterprise and industry policy, tourism policy and climate change. Engagement will need to be throughout the review to ensure consistency with Scottish Government’s priorities and outcomes, to align policy levers and to ensure shared ownership of the outcomes of the review for when the review is discussed at Cabinet level. We propose to engage consultants to carry out the data collection required for the review. This will include on-board surveys and consultation with island residents and businesses. The data will then be analysed and modelled to let us understand the possible implications of different proposed routes. Data collection is anticipated to start within the next couple of weeks. Long term strategy Following the public consultation and completion of the review, a document will be published clearly articulating the decision on the way forward for ferry services in Scotland. The document will contain full information on how any proposals will be funded, the timescale for implementing change and the body or bodies to be charged with delivering change. Finally, the document should state how its proposals will take account of any decision reached by the European Union following its investigation into subsidies to CalMac Ferries and NorthLink Ferries.

Timeline A full project plan will need to be developed for the review. At this early stage however, it is possible to identify some potential dates to take the process forward. August 08 Ministerial sign off of the high level scope and methodology for the review.

September 08 Establishment of the project management arrangements for the review including setting up the required working groups.

October 08 Agree detailed scope and methodology August 08 to Research undertaken April 09 September 08 Other review tasks undertaken to April 09 April 09 Feed preliminary feedback on large cost items such as ports and vessels into the spending review April 09 - May Analyse reports, write draft strategy and public consultation paper 09 June 09 – Public consultation August 09 September 09 Analyse results of public consultation, produce report and write final strategy

September 09 Submission to Ministers for approval

October 09 Review and Strategy for lifeline ferry services published October 09 – Further detailed analysis of recommended strategy, including STAGs. February 2010 Autumn 09 Commence tendering for new Northern Isles service(s)

Autumn 2010 Commence tendering for new Clyde & Hebrides service(s)

Appendix 6: Members of the Project Groups STEERING GROUP NAME ORGANISATION Anil Gupta COSLA Ann Henderson STUC Assistant Secretary Bill Mcfadyen MCA Bob Watson Ferries Division Scottish Government Brian Wither Ferries Division Scottish Government Colin Grieve Ferries Division Scottish Government Dave Duthie HITRANS David Notman Transport Analytical Services Scottish Government Duncan Cm Smith HIAL Euan Dobson Scottish Enterprise Gavin Scott Freight Transport Association Graham Laidlaw Deputy Director, Chair Of Steering Group Guy Platten CMAL John Ballantine DPTAC John Murray PVS Judith Ainsley Ferries Division Scottish Government Ken Duerden ZETRANS Kirsty Lewin Sustainable Transport Scottish Government Lesley Stewart Transport Scotland Richard Arnott Tourism Unit Scottish Government Rodney Mortimer SPT - Director Of Policy & Strategy - Stephen Boyd STUC Assistant Secretary Susan Malcolm National Transport Strategy Scottish Government Tony Jarvis HIE Fiona Locke National Transport Strategy Scottish Government Linda Craik Transport Strategy Scottish Government

OPERATORS SUB GROUP

NAME COMPANY Alan Mitchell Streamline Shipping Andrew Banks Pentland Ferries Andrew Jackson Ardnamurchan Charters Angus Grains Atlantic Ferries Bill Davidson Northlink Ferries Chris Kirkton ASP Seascot David Sawkins Orkney Inter-Island Service Edmund Brookes replaced by Tim Reardon The Chamber of Shipping Gordon Ross Western Ferries Hamish Munro Clyde Marine Motoring Jennifer Francis Skye Ferries Jim Tolmie Highland Council John White Northwards Haulage Ken Duerden Shetland Inter-Island Services Lawrie Sinclair David MacBrayne Martin Gorringe Argyle & Bute Michael Brambell Sound of Mull Transport Group Mike Robertson Kerrera Ferry Phil Bremner Streamline Shipping Phil Preston CalMac Tom Henderson Cromarty Ferry Co

COUNCIL SUB GROUP NAME COUNCIL Alan Barnes Inverclyde Council Allan Comrie Senior Transport Planner - Spt Cameron Kemp Highland Dave Duthie HITRANS David Lodge North Ayrshire Council Ken Duerden Shetland Moya Ingram Argyll & Bute Murdo Gray CNES Naomi Coleman Orkney Rab Dickson NESTRANS Sam Mcnaughton Highland

Appendix 7: Report on First Round of Consultation Events

This Appendix records the comments made to us during the first round of consultation events held in 2009.

OBAN – 17th FEBRUARY 2009

Routes, Services & Integration There was a general feeling that ferry services had little or no integration with other modes of public transport. Some members of the group put this down to large cumbersome ferries meandering from A to B, while others did not believe there was any attempt between public transport operators to achieve a good level of integration. In general, the group believed that timetables were devised independently by public transport operators and took no account of other modes or needs i.e. there was a feeling that bus and rail operators running services out of Oban were more concerned with ensuring their arrival times into Glasgow and Inverness, say, than ensuring their departure times coincided with the arrival of ferries into Oban, particularly if the ferries were running late. It was suggested that smaller, faster route specific ferries would alleviate some of these problems and allow a better level of cross mode integration. The group also noted that ferries did not integrate well with essential services. In particular, health and education were commented upon. Ferry services are often vital to get children to school, however services currently allow no flexibility for after-hours education, supported study extra curricular activities, etc. In terms of access to health care, ferry services often cease at 6pm each night. This means that many islands lack emergency medical cover after hours. This is becoming an increasing concern for those living on the islands, particularly for the growing number of island communities with an ageing population. Many of these communities are therefore feeling increasingly socially excluded due to poor integration of services/facilities. The workshop felt that services are not conducive to commuting for work purposes. Firstly, most of the vessels and crew are berthed / located overnight on the mainland rather than the islands. This means that the first sailing does not reach the island until mid-morning and therefore does not provide commuting opportunities for islanders. Similarly to fares, this means that more people have to leave the islands, with their families, to seek employment opportunities on the mainland. There were strong views that timetables should be altered to take account of the need for commuting. Related to the above, there was a general feeling that CalMac’s services and timetables are more designed to suit the company’s operational needs rather than the needs of the island communities.

Fares The predominant feeling from the group was that fares are currently too high and this is restricting both employment opportunities and business development needs on the islands. There has been a decline in economic activity on many of the islands in the Argyll area in recent years, mainly due to the downturn in farming. This has had a significant detrimental impact on community life and reduced employment opportunities on the islands. Consequently, many people have had to look to the mainland for employment. If people wish to stay on the island, the daily commute can be very expensive and make working on the mainland unviable. As a result of this, a number of people are moving away from the islands, leading to a reduction in population levels and adverse impacts on the sustainability of local island communities. (Timetables are having a similar impact – see below.) It was explained that the fare levels of the Argyll & Bute Council services tend to be more affordable than those set by CalMac but were still expensive if travelling on a daily basis. It was also felt there is no underlying rationale as to how fares are set on routes across the network, although some people felt they had arrived at their current level more by historical accident than anything else. Examples were given of routes with similar characteristics and lengths which had very different fares across all carrying types. There was general agreement that the introduction of a Road Equivalent Tariff (RET) based fares system would benefit users of local ferry services through lower fares, but there was no clear understanding of what the reduction in fare levels would be. In terms of commercial traffic, attendees claimed commercial fares for businesses were set too high. In addition to this, there was a general feeling that fares structures had not evolved with motoring trends. An example was given explaining that small vans are used for the majority of commercial purposes on the islands. In the past, small vans were 5m in length and so were classed in the same price category as cars. In the last 10 years however the industry standard for these vehicles has increased in size to around 5.2m. During this period fares pricing structures have not responded to the evolving market. As such, small vans are now classed with larger delivery vehicles and subject to commercial vehicle rates. This is having an effect on businesses running to and from the islands and in many cases these higher fares have to be passed on to customers. The group believed that without commercial traffic entering and leaving the islands, the island economies will continue to stagnate. At present, the group felt the current fare structures were unsustainable for commercial purposes. The group also believed there to be opportunities to improve efficiencies and reduce costs within the ferry services which could feed through to lower fares. For example, it was felt that there were opportunities to reduce crewing costs and introduce vessels with more efficient fuel consumption and these could be passed on to lower fares.

There was a discussion on the impact of lower fares on the number of visitors to the island. While this could have a positive economic impact it could have the opposite effect on the local road network. There was a suggestion that some of passenger discounts for island residents could be introduced to counter that. For example, discounts could be given to those purchasing multi journey tickets which would then reduce the average fare price. This will ensure that local people who need to access the ferry services for employment and lifeline needs will pay a more ‘acceptable’ fare, while tourists/visitors can continue to pay a premium fare.

Vessels One supplier of vessels of say 5 or 6 types would save on procurement, spares, crew training etc. There should be a commitment to renew ships in the most cost effective way. Speed of vessels and journey times in important to passengers. Routes should be looked at. There may be reasons why a route was established which may not now be valid. Ask Councils, where, if money was no object, they would ideally like routes to be run from and to. Facilities on vessels was not thought to be important on crossings of less than 1 hour, (vending machines ok) However, longer crossings, 1 hour plus, there should be additional facilities for passengers. Shelter was important, as on some crossings no cover was available for passengers. Types of vessel were discussed. A hybrid vessel, run on battery power with engine back up, with community involvement and partnership was discussed.

Ports & Harbours infrastructure Most ports and harbours, although needing modernised, were thought to be fit for the purpose they had to fill. Comment was made regarding the improvements at Oban, particularly for disabled passengers. Slipways were difficult to maintain and were often slippery and required regular maintenance.

Port Operation & Ownership No Comments

Accessibility On older ships there could be a problem with accessibility, while this was not the case with newer ships. The introduction of a star system taking into account all facilities (similar to hotels) was worth considering.

Personal security on night time travel was considered a problem for some people.

Funding The workshop enquired as to whether there was alternative funding streams available (European funding etc) which could be used to fund specific agricultural and commercial services. It was suggested that the European Community should be approached to see whether there were opportunities to subsidise farmers, and others in the agriculture industry, through fare reductions to help support essential industries on the islands.

Methods of Delivery & Operation A public ferry operator is perceived to offer a degree of sustainability/security of service. However the ferry business is not a core activity of government (it lacks the right skills?), and public operators are said to have a lack or versatility or flexibility, and are not customer oriented. Public ferry operators are thought more likely to have inadequate or inappropriate ships and to provide excess capacity than the private sector. The ‘main issue’ for some users is a need for change in the ships/fleet and a need for ships to be designed/built for dedicated use on specific routes rather than ships being built to serve several different routes, the latter with different operating and demand characteristics. A private operator would probably save on operating costs but perhaps not if vessels are ‘given’ to a public operator, albeit this may limit potential for private bidders (it would certainly disadvantage them). However, a private operator is viewed as likely to be more flexible in tariff setting. There may be confusion in terms of accountability although this would be mitigated where adequate service (PSCs) contracts are in place. A private operator would be more likely to cut public expense and provide greater efficiency. It may also be easier for the private sector to raise capital for investment. Private operators would also maintain better control over crew and other key costs. A private operator would be expected to be more flexible (e.g. by offering later sailings, or maintaining enough freight capacity and avoiding giving passengers, cars and coaches priority, and in carrying unaccompanied HGV’s, the latter a problem for Mull hauliers). Financial Incentives RET is considered positive for users and a benefit to the isles economies. However it was also thought that there should be islander discounts as a general rule on all routes. There is considered to be a need to attract private capital into ferry services. Private firms it is believed would have access to capital more especially on the back of winning contracts from the public sector to run lifeline services. Banks will lend to private ferry operators backed by long-term contracts. Subsidy is still needed whether for public or private operators

Competition & Procurement The current large route bundle option is thought to provide for some economies of operation. The notion of adequate vessel relief provided by a larger bundle was also stated. However the large bundle discourages private bidders as it is too complex, cumbersome and expensive for private operators to prepare a bid. The fact a public ferry company bidder has bid costs underwritten by government is another disadvantage for the private sector. A public monopoly operating a large bundle is considered a weakness. Options for smaller bundled tenders and for individual route tenders could be offered. This would provide for greater simplicity in terms of contracting and give scope for flexibility. This option could result in more innovative new solutions being proposed. Obsolete ships are the key problem and there is therefore a need to have tenders which can deliver major vessel improvements. The current CalMac approach with vessels trying to operate too many routes/”trying to be everything”, is considered flawed, as this means some vessels are unsuited to particular routes. Community ownership is another option, perhaps for short, small volume routes, however not all small communities would be willing to bring forward such an option and there may be reliability concerns.

Freight Current ferry operating hours are inadequate for freight, which requires earlier and later sailings than are offered today. The requirement for drivers to accompany HGV’s leads to higher costs for hauliers, and poor service frequency results in drivers being left stuck on the islands for much longer than necessary. Attention also needs to focus on improving logistics for return of empty trailers and pallets, and transport of recycled materials, with faster more efficient turnaround achieved. Current vessels on a number of routes are unsuited to carry hazardous cargo due to use of enclosed vehicle deck ships. Trucks are missing return ferries due to inappropriate sailing schedules and poor frequencies. Future freight traffic growth opportunities in the region include timber, LPG and waste (including need to empty septic tanks on various islands). Currently the main problem is that the public ferry operator provides what he wants to provide, not what the freight user needs. And passengers, cars and coaches get priority on CalMac which means freight can be left on the quay. Services can be improved by using vessels that can take hazardous goods and other cargo, over a longer operating day, with a boat based on the islands. There is considered to be scope for faster, lighter ships, and using more ships offering greater frequency. Freight logistics firms are now expressing an interest in running their own ferries or looking to make an investment in ferry services, such is the unacceptable level of service provided by the public operator and the belief by

private transport/logistics firms that major improvements are possible relative to what is currently offered.

Other The workshop felt that the lack or poor level of ferry services has contributed to the problems of population sustainability currently being experienced on the islands. There are currently ‘lost generations’ on every island. There is clear evidence through demographics of an ageing population on many of the islands with very small numbers of people between the ages of 18 and 40. The lack of services means that the islands cannot attract young couples. There are no later ferries to allow younger people to enjoy a social life on the mainland and then return to their respective islands at night – many of the last ferries are in the early evening. Poor ferry services have a knock on effect through employment, social needs and eventually dwindling populations. A large number of ferries in use are old. As such, they are far more susceptible to inclement weather, which means that service reliability due to the weather can be poor. Late and cancelled sailings have a very significant adverse impact on the economic well-being of the island communities and can lead to issues of ‘panic buying’ of essential goods when incoming vessels do not arrive. GREENOCK – 23rd FEBRUARY 2009

Routes, Services & Integration Respondents appeared to have no complaints over the currents routes provided, but felt that modern needs and demands should be considered and that there was opportunity to consider additional routes. Those mentioned included: Advanced services on the Clyde, such as the River Boat concept, were discussed. Additional services were also said to be required between Gourock and Rothesay. Other, historical routes (that are no longer used), for example between Gourock and the Kintyre peninsula, could be considered. Some of these were thought to have the potential to reduce carbon emissions by reducing the distance HGVs are required to drive. An additional winter service was said to require to/from Lochranza as visitors cannot get there from Argyll during the winter months. The connectivity between the roads and the ferry terminal in relation to HGV users was also discussed. It was felt that the quality and capacity of some of the roads, both on the islands/peninsulas and on the mainland were not sufficient to allow HGVs to access the ferries without disrupting other road users and creating bottlenecks

Services In relation to service timetabling, one issue was highlighted in relation to Arran – the last ferry to Arran is at 6pm, making working on the mainland and

commuting difficult. It was suggested that the timetables could either be extended, or alternatively, reversed so that the first ferry in the morning leaves from Arran and the last ferry returns to Arran – thereby allowing islanders the opportunity to work on the mainland. In general, it was considered that an increase in the number and frequency of services to/from Arran was required. Given the current service, it is necessary to book 6 weeks in advance in order to take a car across to/from Arran. It was suggested that two smaller and faster boats would be more suitable than one larger vessel. One respondent stated that “Arran is the only major island in Scotland not to have two boats.” Further, it was felt that the use of only one boat severely limited the service and the opportunity to visit the island, thereby affecting the tourist industry – it was felt that the wait between sailings was too long due to there only being one boat, and that faced with the possibility of around a three hour wait for the next crossing, day visitors would be unlikely to visit the Island. However, if there were two boats undertaking the crossing, the wait between services would be more acceptable. During the summer, the Saturn vessel provides an additional service which is seen as vital. However, if there is a problem elsewhere, the Saturn is taken to fill the gap, leaving the Arran service lacking. It was felt that this was a vital service and its loss, on occasions, was a serious problem. The main vessel used for the Arran service is the Caledonian Isles. However, as this is a closed boat, and the only service capable of taking freight, if a tanker of natural gas or petrol is on board, the capacity declines in line with the dangerous goods rules.

In relation to the Colintraive to Rhubodach service, the first sailing is at 9am on Sundays, so it felt there was scope to provide an earlier service.

Integration It was felt that better integration was required between the ferry services and both the timetables and ticket options of other public transport operators. Integration was considered essential for connectivity and equality of the residents of island and remote area communities. For example, they are entitled to the same access as those on the mainland in terms of access to schools, further/higher education, health care and hospitals, employment opportunities, etc. It was felt that the current level of service was disadvantaging those in remote or island areas, compared to those living in, say, central Scotland. While it was acknowledged that some multi-modal ticket based products do already exist, (e.g. SPT can provide tickets straight through to Brodick encompassing the train and the ferry on the one ticket), it was felt that this was limited, (e.g. you cannot buy the same ticket at the ferry terminal in Brodick for the reverse of the above journey). Therefore, there is scope for improvement and for integrated ticketing to be rolled out on a wider scale, particularly for those living on islands or remote areas.

Some ideas for ticket integration included a form of SmartCard or Oyster Card type system. It was also felt that this could perhaps be incorporated into the tendering process – although it was acknowledged that this is dependent on co-operation from existing operators. One issue may be in the assumed existence of services – due to de-regulation, bus operators are not required to run certain routes if they are not profitable. The integration of timetables was also raised as an issue. Some respondents mentioned that the time available to catch connecting services can be very short, leaving little scope for delays anywhere in the chain. It was mentioned that if the ferry was late, the train services designed to connect with the ferry’s arrival, would not wait. While respondents understood that the trains ran to a timetable and that they would cause problems with a late arrival at their end destination, they felt it was very frustrating to be stuck on a ferry and able to see their train leaving. It was felt more generally that there could be more co- operation between transport operators when designing their timetables. One location specific issue was discussed with regards to Gourock ferry and train services. The platform location for the departing train was not the most suitable (i.e. the furthest away platform from the ferry was used), meaning that passengers had to run, often with luggage, from the ferry to the train. This provides the perception that operators are not communicating with each other and working together Park and Ride facilities (similar to those for train users) were also recommended for ferry terminals to allow commuting without the need to take the car. The cost involved in taking the car when commuting was considered to be prohibitive, however, the lack of all day parking facilities at the terminals was felt to restrict islanders’ ability to work on the mainland. It was explained however that while parking problems at some ferry terminals is clearly an issue, these will be picked up when the Strategy has been agreed. It was highlighted that people would like more communication from the operators, especially in the event of delays and/or cancellations. Brief comments were also made that facilities should be DDA compliant, however, CalMac confirmed that the DDA only applies to land based services, not water based – there are guidelines only for ships. Also, it was suggested that the facilities for passengers should be improved, for example by improving the waiting environment in the terminals.

Fares It was suggested that the current fare structure is too complex, with too many different fare structures/ticket types. Respondents felt that this needs to be simplified/rationalised. For example, some respondents felt that the need for separate tickets required for a car and its driver was unnecessary as a car cannot cross without its driver. There was therefore to combine a number of the ticket types. The price of tickets was discussed at length. One respondent from Arran stated that there are some days where ‘peak’ fares apply (to/from Brodick), meaning that it is impossible to visit the island without incurring the peak fare. These peak fares (which apply to cars only) were considered to be too 23

expensive, and detrimental to the tourist appeal and prohibitive to attracting families to the island. It was also felt that many fares were not reflective of the distances travelled, or comparable with similar services. Historically, fare prices had not risen pro- rata/comparably with other routes. More standardisation of prices would be welcomed. In relation to this, some respondents questioned why the RET was currently restricted to the Western Isles and felt this could be rolled out across the network. Another suggestion for future fares was a system similar to the Air Discount Scheme, where island residents receive a 40% discount/reduction in fare prices. Respondents also wondered if fares could be frozen for three or five years. As funding/budgets are often set for 3/5 years, the ability to set fares for the same period would help individuals or businesses prepare medium-term plans. According to the respondent, this apparently works well in Scandinavia.

Vessels It was generally agreed that, on the whole, the quality of the existing vessels is good. One respondent suggested that ferries should carry defibrillators in case of medical emergencies on board. It was felt that the Ardossan harbour is not suitable for the size of boat it accommodates. In bad weather, all services tend to divert to Gourock, thereby reducing the usefulness of the services. This also causes congestion problems at Gourock. It was felt that Gourock harbour needs considerable investment. It could accommodate up to 20 boats at one time, but now can only take one. It has suffered from a lack of investment and now needs considerable funds to make the improvements Will future ferries need? crew accommodation, does this; add to build costs Running costs Reduced revenues utilising modern designs to reduce crew numbers use standardisation to reduce build costs does the design of some ferries make them more likely to be re-directed to other ports in the event of bad weather, impacting on other services?

Ports & Harbours infrastructure Arran possibility of replacing existing ‘large ferry’ with 2 smaller ones? 24

Will future designs be open stern? Do they need extensive hotel facilities? Will they operate longer working days? Additional winter services e.g. Lochranza – Claonaig Are there opportunities to help commuters more Ardrossan Harbour is their a plan for the future development of the harbour? Gourock – Dunoon opportunities for a passenger / vehicle only services? Local procurement for ferries in the future e.g. Fergusons Potential for central procurement strategy for all ferries? Argyll and Bute Council Potential for one agency looking after all publically owned ferries? Possibility of standard ferry and harbour designs in the future? Infrastructure How can we make this part of the wider transport strategy i.e. linking ferries – trains – buses – cars. Also how do we encourage this? Is there a better way of involving the private sector? Harbours Do we have too many locations, and does this result in resources being spread too thinly? Are the harbours in the right locations, or based on historical reasons, if we had a blank sheet would we put them where they are? Is the supporting shore side infrastructure there to support future harbour developments e.g. roads and rail?

Port Operation & Ownership No Comment

Accessibility Staff are important and can make a big difference and can often help overcome the design ‘faults’ which can hinder accessibility both in harbours and on ferries, can we make this good practice a standard across Scotland what are the DDA requirements and can we strive to meet these? Is there a way of making the passenger access ramps have a lower incline? Covered walkways are seen as a very welcome addition, but sometimes small details such as heavy manual doors make access more difficult, would automatic doors be an option for future design?

Improving the level and detail of information to people travelling with accessibility issues was viewed as important, would a ‘rating’ system which scored harbours and ferries on their level of accessibility be a good thing? Best practice should be our goal, is there a way of learning from existing best practice across Scotland (private and public sectors) Should the level of accessibility be proportionate to the harbour or ferry and the routes and passengers it carries, and does this comply with DDA.

Funding Little was known about this area by the respondents, therefore the discussion was short and limited. Arran’s population is increasing; however, it is largely an aging population. Many of those that are entitled to the concessionary fares have expressed surprise that the fare is free. Many would be prepared to pay a small fee, for example 50p. The opportunity to tender the catering services and bring in concessions similar to those in train stations was discussed. Although, it was also identified that this may have implications for the staff to passenger ratio. Is there a better way of allocating funds for the procurement of ferries and harbours, at present allocating through the various councils and other agencies makes it difficult to realise procurement efficiencies and savings? The spending review seems to make longer term asset planning difficult, is there a better way?

Methods of Delivery & Operation Discussing the strength and weaknesses of methods of delivery the workshop participants shared the opinion that public ferry services are potentially less affected by economic downturns and thus may provide a security or continuity of service. However, public sector delivery was associated with inflexibility on service operations, high/complex fare structures and a lack of stimulation for innovation (technological and operational). The public sector was considered less likely to innovate on ship design. Closed deck arrangement on Arran was a constraint for hazardous goods. Paradoxically during difficult economic circumstances the limited availability of public finance was considered to be a risk to future services. Generally there was a willingness to consider different alternative approaches to service delivery and operation. Financial Incentives The current system was very costly and costs are rising. Pension liabilities were mentioned and these reside with CMAL as vessel owner. This may not necessarily be a positive factor if bidders were to offer alternative/superior vessel solutions. A key issue is new ships and where/how these are to be financed? The 6-8 year contract period may be a constraint for private investors, however, this does not appear to be the case in other subsidised ferry markets.

A disincentive may be the lengthy time needed to work through the tender process and then to prepare a bid. Private bidders must pay their own costs whereas a public sector bidders costs are underwritten by the state

Competition & Procurement In the discussion on competition and procurement, importance was given to the structuring of tendering processes. Tendering procedures should have a minimum of complexity, and strict timelines. Tender requirements should include clear incentives for innovation and efficiency of operation. Tenders should be the way to guarantee competition over time. Once a route is tendered it should be protected for the time of the tender from competing services on the same route. One option may be to do this via some form of licensing. Tenders must be run in compliance with EU regulation. Timelines of 6-8 years seem to be attractive to give incentives for innovation, if the efficiency and streamlining of the tender process can be assured. Some concern was expressed regarding non-national operators operating services in relation to reliability of service delivery. Procurement should prevent “cherry picking, though this was not well defined. The ability of cross subsidise routes was seen as a strength of the current large bundle (albeit this may be illogical given there are no profitable routes at present). However the current approach seems to hold back innovation, more especially if ships are fixed, and hence the cost structure also.

Freight Participants stated that the strength of public ferry service provision is in the continuity in delivery. At the same time however, they saw weaknesses in relation to pricing levels, which also affects retail prices of products on the islands and the competitiveness of islands’ produce in the market. An example was given for Gigha, where for a 20 minute crossing the cost is about £250 for a HGV. Freight rates were viewed as being too high on some routes, although through RET they had nearly halved on other routes (e.g. Stornoway HGV rates had reduced from a high said to be about £1200 per HGV). Improved coordination with existing logistics planning would improve freight services. This also includes improved facilities at interchanges (e.g. cargo consolidation centres) and improved reliability. Coordination of sailing times to fit with working hours, delivery and pick up hours would be beneficial to freight users. Transit times were seen as relatively unimportant when compared to reliability and predictability of sailings. Although faster sailings were a ‘nice to have’, it is the ability to plan reliably around services that is of the greatest need. Services that are quite often cancelled are a major problem for the business community. It was noted this issue is particularly frustrating for routes like Ardrossan – Brodick, where sailings are often cancelled not because of the sea condition, but because bad weather has affected the ability of the ship to manoeuvre in the port itself. Is this a harbour investment issue and a relatively simple fix – or is Troon

perhaps a better option? Are the ships too long to manoeuvre in a confined harbour space? Would two smaller vessels be better in some instances than a single large ship? Would 2 smaller lower cost/lower crew vessels on a route such as Arran also provide for an increase in frequency, immediate refit/repair cover, longer operating day etc? RET was seen as potentially creating a conflict for capacity utilisation between passenger cars and trailers and trucks, especially if RET would reduce prices so far that efficiency in capacity usage of trailers would reduce (i.e. increase in shipment of part loaded trailers). RHA members had identified potential for RET to make some routes more attractive for tourists and other users, and that might impact on available capacity left for freight. This might tie in with the perceived bias towards prioritising passenger movements on the network to the disadvantage of freight clients. Potential for growing cargo flows was seen in relation to green energy generation (e.g. wind turbines) and timber. Long term timber extraction from Arran and Mull is viewed very positively. Kintyre timber is currently barged out to Troon? (follow-up with Neil Dyson from Dumfries and Galloway council). It was stressed that the balance between capacity supply and demand needs to be watched closely in order to ensure the further developing of economic activity on the islands. In future, Hauliers would like to see greater operational flexibility in the service (there is a general perception of a ‘take it or leave it’ attitude from the incumbent operator) – this may be related to the tightness of the contract between SG and the operator which limits flexibility on arrival and departure times etc. There is perceived to be a need to think about the impact of Hunterston – if it gets developed as a container port – will this impact ferry usage? (However it also appears that owner Peel Holdings has a focus on Liverpool for that activity). Interesting point made on the RET type scheme in Norway is that RET there is calculated on the road equivalent cost of driving the long way round a fjord – levelling the cost of ferry to road, so that cost is the same, but journey time is better. The Scottish interpretation of RET was the sailing distance at road rates, which invariably would be far shorter than a by-road alternative, where any such option exists. Port charges on freight were also mentioned as a factor. Ultimately subsidy for freight should be regarded of at least equal importance as subsidy to passengers. Services had to be consistent, such as the need to maintain year-round service on Lochranza-Kintyre. It was mentioned that some services might actually depend more on freight revenues that on passenger revenues.

Other It was felt that there is a need to get children used to using public transport and therefore it was important that the children’s facilities should remain.

The cost of living on an island was directly related to the cost of freight and it was felt that the increasing cost of carrying freight was being passed directly on to island residents. If the Government wanted to see population levels on the islands being maintained, one way would be to reduce the cost of transporting freight to the islands. There was an important issue raised in terms of cross-boundary responsibility and priorities. The Wemyss Bay – Rothesay services crosses both local authority and Regional Transport Partnership boundaries (Wemyss Bay is in Inverclyde Council area and SPTs area, while Rothesay is in the Argyll & Bute Council area and HITRANS area) leading to confusion over who is responsible for providing the services and vessels to the populations. There is a perceived lack of flexibility in the current system, for example it is not possible to book a car onto certain routes online, it has to be done at the terminal. This means a long drive just to book your trip. It was hoped that this is something that could be addressed, with the online booking system expanded. Reliability – any bad weather that results in cancelled sailings can lead to traffic build up while waiting for the services to start again, as well as negatively affect the business on the island, and can lead to panic buying on the islands if there is uncertainty about when the next sailing will be. Powers and structures of government. Concern was expressed that the current system/status quo does not give incentives to innovation and might create a lock-in situation impeding technological and operational development of ferry services. The big bundle tender may be too complex and cumbersome for private bidders. Transparency, streamlining and efficiency of tendering and procurement processes should be the focus of future developments. However it was felt the UK tries to play too strictly to EU rules compared to other member states. Regulation of competition on the same routes needs to be looked at in detail and subsidised services should not compete with economically viable private sector services. In such situations the allocation of subsidies to such a service is counter-productive. In Norway competition to subsidised services selected via tender is not permitted. Strong public usage needs an adjudicator/regulator. A regulator would find gaps and deal with conflicts. Environmental issues. The expressed opinion focussed on the potential of technological innovation in ships to improve environmental performance. Flexible tenders might allow for comparison of different ship options giving different environmental outcomes. In this sense a fixed fleet pushed at any and all operators could be a constraint. Further, the potential of modal shift from road to sea was regarded as important and merited analysis. Again this could be a function of more flexible tenders where bidders might propose alternative ways to deliver ferry services. Environmental Issues. Are there opportunities for adopting ‘green’ technologies on ferries and harbours? E.g.

Batteries / fuel cells Alternative fuels Wind and wave energy Plug in facilities for hotel loads when alongside do some of the routes lend themselves to adopting current technologies e.g. fuel cells? Would fixed links be a better ‘green’ alternative for some routes? Is there an opportunity for Scotland to become world leaders in green ferry and harbour design? Terminology The term ‘life line services’ was seen as emphasising the need for public ownership LERWICK 26th FEBRUARY 2009

Routes, Services & Integration Bus integration was mentioned and the need for better joining up between island services. A minibus shuttle service (particularly aimed at tourists) would be beneficial. Work is being done at the moment by the council to investigate how to get the scheduled bus services to better link in with the NorthLink arrivals. Happy with services and times. Level of comfort an issue. There should be somewhere to sleep and shower for those without cabins.

Fares Government subsidy working well and should not be decreased and maybe even increased from 25% to 33%. Fares add a cost not borne by mainland companies (e.g. aquaculture companies) and so need to be kept at a reasonable level to ensure competitiveness Lane metre rates a problem particularly for partial loads. Small scale freight providers at a disadvantage Important that crews understand the sea conditions likely to be experienced on the route Vital that there is a dependable services as customers such as supermarket chains will go elsewhere Lot of perishable goods of high value. If sailings delayed for too long then money can be lost. External Ferries – Fares - Island residents currently receive a discount based on the cost of passengers and cars. This discount should be rethought so it is 30

based on cabin use, not car use (i.e. passengers can choose whether or not to take a car, but taking a cabin is viewed as essential). A consistent approach to funding should be adopted by the Scottish Government as CalMac receive significantly more help centrally than Shetland Islands Council do. This was seen to be unfair on local government. Provision of the inter-island ferries should be seen as equivalent to funding roads. Passengers on the Bluemull Sound route do not have to pay fares currently and this could be extended to other routes. Ferry crossings by car are a particular expense for those commuting from the islands to the mainland. It was questioned whether there could be a monthly commuter card brought in on the ferries (rather than the 10 journey tickets which are there are at present). The fares on the internal routes are set by Shetland Islands Council and are uniform – one set of fares is in operation for the ‘near’ islands (Bressay, Whalsay and Yell) and another set for the ‘outer’ islands (Skerries, Fair Isle, Papa Stour and Foula). Inter island fares should be free. This would help staff businesses and care homes Fares too expensive for commuters.

Vessels Significant concern expressed regarding age of current freight vessels which are both over 35 years old Severe implications for Island economy if a catastrophic breakdown disrupts the sailings o the freight vessels for any significant length of time A purpose built freight ship designed for the route would be the preferable outcome. Early decisions needed for replacement vessels wither charter or purchase Happy with current schedule to Aberdeen but option for a weekly sailing to Rosyth should be considered Reliability and flexibility in sailings is a key requirement Holistic strategic long term view must be taken Much merit in coordinated procurement of lifeline vessels throughout Scotland with standardised designs and common procurement action producing savings. There was discussion over using smaller catamaran vessels on the Foula and Fair Isle services. No real complaints about NorthLink. Lack of cabins in high season a problem. Keep the a la carte restaurant Level of comfort an issue. There should be somewhere to sleep and shower for those without cabins.

Ports & Harbours infrastructure Keep Aberdeen as port. Not Peterhead. Better for shopping and other facilities

Port Operation & Ownership No Comments

Accessibility No Comments

Cost & Affordability No Comments

Funding No Comments

Methods of Delivery & Operation External Ferries – Contract The NorthLink ferry contract could be split up, so the Pentland Firth and the North East routes are separated. The Pentland Route receives high levels of subsidisation; around £12m of the £31m that NorthLink receives is spent on this route, which seems absurd given that two operators (Pentland Ferries and John O’ Groats Ferries) run wholly commercial ventures in this stretch of water. The point was raised that NorthLink do not pay any National Insurance. They are a state owned company but operate the crewing through Guernsey. It should be a condition of the contract to employ the crew via a UK company so National Insurance has to be paid. External Ferries – Operational Issues The length capacity of Aberdeen harbour was frequently mentioned as the main constraint to increasing capacity on this route. Aberdeen does have larger ports but these are industrial and located further away from the train station/centre of town. It was felt these are not as suitable for passengers as the present location. A number of alternative ports were proposed such as Peterhead, Inverness, Rosyth/Leith. The NorthLink service could potentially be diverted to one of these ports one day per week (it was actually recently diverted to Rosyth as bad weather meant it couldn’t dock at Aberdeen). There would be a need for supporting transport infrastructure though (i.e. the roads south of Peterhead are considered inadequate, and Rosyth doesn’t have the same quality of public transport integration as Aberdeen). Rosyth would be a useful destination for the freight companies depending on what time the boat arrived. Many voiced concerns over capacity of the boats in the summer, stating there wasn’t enough space at peak times, problems with the cabin booking system (i.e. a cabin is booked for the entire journey, not just the first leg (i.e. Shetland to Orkney)). It was questioned whether a number of cabins could be kept aside and reserved for locals, so there would be less chance of people having 32

problems when trying to get home. Cynthia Spencer (Commercial Director of NorthLink) answered many of these queries stating that capacity reaches are rare (there were 12 occurrences last year), and they have the ability to put on extra sailings (e.g. one was put on for the Highland Games in the past) but there are other factors to consider such as crew hours, fuel and harbour dues. NorthLink would be concerned about discriminating between passengers if they were to give Shetland residents priority over tourists. Capacity constraints will be exacerbated if the vision to grow future population and tourism levels in the next 10-15 years is realised. Ferry service too Orkney focussed. The market of this route needs to be recognised and exploited (i.e. many visitors to Shetland come from SE England) so the emphasis should shift away from the Central Belt – Orkney passage. The frequency of the ferries could be reduced in winter given that the carryings on the boats are so small (sometimes only around 30/40 people). You could have a passenger sailing every other day, and fill in the gaps with the freight service which has a small number of cabins. People shouldn’t live off subsidies and be used to this ‘Rolls Royce’ level of service all the time. A number of schedule alterations were suggested, such as scope for a ‘half sailing’ in summer to increase capacity on the route (i.e. the boat could sail from Aberdeen to Kirkwall and back again during the daytime as it presently sits idle in Aberdeen harbour from 7am till 7pm) or scope for a two vessel shuttle (making Shetland – Orkney and Aberdeen – Orkney return trips). Some felt that extra sailings can be undertaken, but NorthLink are reluctant to do this as they would receive no subsidy for it. Alf Baird agreed that idle time is an issue, but it’s possible that sailings could infringe on the next timetable and cause operational problems. Couchettes should be introduced on the route. The cost was cited as around £100k. Complaints were made regarding lack of sleeping space for those without cabins and also lack of showers. The design of the boat was discussed; the boats are too high and not suitable for the ocean which they sail in. Again the main constraint on this is the size of Aberdeen harbour. During off-peak periods there can be as few as 20-40 passengers on board the ferries to Aberdeen. Costs could be saved by reducing service frequency in winter for passenger vessels. Freight boats also have a few cabins so a daily pax service could be maintained. There was concern that the cancellation of the couchettes would lead to a continuation of capacity problems on the passenger ships during peak periods. A revised summer schedule could help overcome car/cabin capacity problems. It was suggested that rather than leave the passenger vessels in Lerwick and Aberdeen during daytime, both ships could provide an additional return trip to Orkney, whilst still maintaining their regular evening sailing schedules. This would provide substantial additional capacity, as well as

giving options for new traffic generation. On the downside it would involve significant additional fuel and crew costs. Tender options for the next bids in 2012 should include the possibility for new boats. There is a need to change the current boats to provide for more car and cabin capacity, plus the elderly freight boats will definitely need replacing anyway. Lack of capacity and poor ship design are considered key issues. Could a new tender maybe generate some interest from an operator to provide a seasonal Lerwick-Bergen service? The July (5th?) expected changeover date for a new operator was described as the worst possible time as it is at the height of the summer season and could lead to difficulties. Aberdeen harbour is still regarded as a problem port as it can be closed during south easterlies and at spring tides. The harbour needs modifications but port managers there are not willing to make them. Rosyth is viewed by some as a good alternative option, though this is by no means a universal view, particularly in the freight sector. The current 4 ship arrangement requires a lot of crews and also added costs for use of 2 berths at both Aberdeen and Lerwick each day. Alternatively, the use of 2 larger ropax ships would reduce total crew requirements and berths needed, thereby reducing total costs. It was argued that Shetland needs a dedicated service to Aberdeen with 1900 departures daily. Cabins taken up for Orkney represents a problem for Shetland travellers. There are no shower facilities on the boats for those who have to travel without cabins. It was claimed that NorthLink is not very customer-oriented and not very helpful to passengers during periods of service disruption. Powers and structures of government - It was suggested that the council and Zetrans should be involved in any selection panel deciding a new operator in future tenders.

Financial Incentives The islander discount is based on passenger and car fare, not on cabins. It was suggested that it might be better to take the discount away from cars and give it to cabin costs. Reason for this is there is pressure on car deck space on the ropax (passenger) ferries, and this tends to max out first. This is also caused by a lack of cargo space on the ropax ships (i.e. single freight deck design). A disincentive (to bidders) relates to the 16-year lease on the ships, which is expensive, and new bidders may not wish to use the existing vessels for a variety of reasons. Making crewing arrangements via a Channel Islands company is seen by some as a tax dodge. Tenders should have conditions to ensure employment of UK crews via a UK company that pays UK NI contributions.

An operator’s bid costs can be recovered but not start-up costs. This places an added burden on non state-owned bidders. It is anticipated that in the next bidding round there could be one or two serious bidders from the Northern Isles.

Competition & Procurement Little room for two rival operators on service Very difficult to compete with NorthLink Inevitably there will be a monopoly on the route Ferry contracts in the Northern Isles could be split into smaller bundles. The Pentland Firth should be contracted separately from the Aberdeen- Shetland/Orkney services. On Pentland Firth there is no market failure as competition exists there. A Shetland boat at the moment has to replace Hamnavoe on Pentland Firth during refit periods. This is not good for Shetland. The problem is that CalMac cannot sub-let Hebridean Isles as they did before because of the new CMAL contract conditions. So another NorthLink boat now has to cover for Hamnavoe. Present Northern Isles services are too “Orkney focused”. And the marketing focus targets central belt-Orkney traffic, whereas most of the tourists and visitors coming to Shetland are believed to come from the south-east of England. Some believe the primary aim of CalMac is to ensure the ongoing existence of CalMac. CalMac have sought to put in place barriers to entry for future operators/bidders, e.g.: HR services are now provided by CalMac HQ Gourock; Finance is now based at CalMac HQ; Engineering/maintenance is also at CalMac HQ. These are perceived as barriers to local consortia bidding to operate Northern Isles services as previously such functions were based in Aberdeen. (Not certain how these are really effective barriers to entry). It was felt that CalMac had little understanding of Northern Isles routes when they took over from P&O as their boats needed a number of adaptations to make them more suited to the job.

Freight Increases in fish volumes reported for this year already with volume up 26% in January. Trend set to continue Aquaculture industry currently ‘standing still’ but could well increase in the future impacting on ferry demand Fishing worth £220m in exports from Shetland alone Service needs to be attuned to business needs

External Ferries - The freight services (NorthLink and the twice-weekly sailing by Streamline) play a vital service in the Shetland economy, i.e. there are big contracts with M&S on the island and it’s crucial that the goods are shipped where they need to be on time. The trend for freight is growing; white fish volumes are up 28% and there is potential to expand the market in aquaculture. The combined fisheries industry is worth £220m to Shetland alone. The freight services will always require subsidisation and market volumes are not sufficient to justify competition on the route. The time critical nature of freight means that flexibility is desired in the freight timetables. It was felt that targets (and the penalties for late running) are adhered to at the expense of demand responsiveness. Inter-Island Ferries - SIC own 13 ferries, operate 12 and contract 1 out to Atlantic Ferries. They own 19 ferry terminals, operate 16. The routes cost around £11.8m per year to operate (revenue cost only) and the council receives around £1.3m in farebox revenue. Zetrans strategy assumes population growth in Shetland by 2020 of another 3,000 people, and tourism growth of over 50%. The economy is being “throttled” just now by a lack of shipping capacity. NorthLink is now at its peak and is capacity constrained. Ships have a lack of capacity and are considered to have design limitations. Weather disruption is much greater than it was previously, plus the ships seem to encounter more storm damage. The operator needs to be able to hold the vessel for freight a few times a year without penalty. Current roro freighters are considered too old and now suffering breakdowns. A decision on new boats is needed urgently. Fresh products benefit from early arrival in Aberdeen. But Rosyth could be an option. Too many cars carried in summer means less room for freight on the ropax ships. The ropax ships have very limited freight capacity. More capacity is needed. Logistics sector is unable to predict future freight volumes. But if population does grow, and tourism expands, then freight will also grow. Services are considered to be quite good today. However that does not mean there is not scope to improve even more through the next tender. Use as commuter and for mainland freight (knitwear) - UPS – Streamline, 5 day lead up, 12 day delay. Heading north, uses NorthLink quicker to set up. Cost of sending smaller than max no of animals. Need to be able to pay by card on inter island ferries. Inter island ferries should be cheaper to keep young people on the islands

Performance regime, not able to leave late and make up later or penalised. This impacts on costs and happens about once a month. Freight vessels old

Other Three STAG appraisals have been conducted to date: The key recommendations of the Whalsay links study are to build one Yell- sized ferry to operate with Linga, build new terminals at Whalsay and Laxo, and upgrade the diversionary port at Vidlin. Costs are estimated at £32m (£48m including optimism bias). The key problem on the Whalsay link is the state of the current ferries; The recommendation of the Bressay study is to build a tunnel linking Lerwick with the island, thus removing the ferry link altogether. The cost of this is estimated at £34m (£26m plus £8m optimism bias). Given current funding constraints it is likely that the ferry will continue in the short to medium term. The vessel is due for replacement in 2017. It is the economy of Bressay, rather than the state of the vessels, which is the key driver in this study; and the recommendation of the Bluemull study is to continue with ferries in the short to medium term. The preference is for a tunnel but given funding constraints this is not a likely option at present. More STAG appraisals are to be undertaken in future when resources within the council permit. These studies will look at the Fair Isle, Foula, Papa Stour and Skerries routes. The point was made that Shetland’s economy add considerable value to the Scottish and UK economy as a whole. This cannot be underemphasised when thinking of the importance of passenger/freight ferry connections, and could be used to justify expenditure for Shetland’s ferry network. Environmental issues - A criticism relates to the absence of environmental issues in the lifeline contract. NorthLink is believed to now be buying ‘dirtier’ fuel than before, and there is no requirement for them not to do so. Use of alternative low-emission fuels need to be considered more in the tenders. The Whalsay boat design was described as poor, whilst the Yell Sound boats have been a success. In general people seemed to be well satisfied with internal ferry services. NorthLink will not do extra runs when asked. People were looking for a bit more flexibility. At peak times there is no spare capacity. Some folks are unable to fly for health reasons and at times there are no berths left for people needing to go to hospital in Aberdeen. There should always be space kept for exceptional circumstances/urgent trips by island residents. Other options might be larger ships with more car deck space and more cabins. An extra run by a ship, say 3 trips in 48 hours rather than 2, would

provide extra capacity. Daytime sailings were run for the Island Games so it can be done. However there are crew issues to consider. One issue concerned the fact that a 4-berth cabin was cheaper than a 2- berth? Consultees again stressed the possibility for each passenger ship to do a daytime voyage to Orkney to provide for added capacity. This could give Orkney and Shetland more attractive services, e.g. allowing overnight services to connect Lerwick-Aberdeen and Aberdeen-Lerwick directly, and providing daytime services to/from Orkney. Car parking at the Lerwick ferry terminal was considered a problem, though capacity has recently been increased.

BARRA – 9th MARCH 2009

Routes, Services & Integration Services & Routes - Everyone agreed that there should be an increase in the frequency of sailings. Between Mid October and December Barra has 4 services per week - three direct and one via Lochboisdale. From end December to March the number is reduced to 3 sailings a week. If one sailing out of three is cancelled the community can be left with no mainland connection for several days. This has further implications for ‘emergencies’ and arranged hospital appointments. It was thought that a minimum level of service should be guaranteed in winter. The summer timetable seemed better, yet still unacceptable. 2 sailings/week are provided via Lochboisdale and one via Coll/Tiree which add hours to an already lengthy journey. In addition, no Saturday sailings are available from Barra which causes implications for the change over dates of self-catering accommodation. Tourists can return to the mainland by the Barra/Eriskay ferry, and then Lochboisdale/Oban but this cost extra and extensively lengthens the journey. Overall, the participants thought that the current joint service with Uist did not serve either communities particularly well. The group felt that there should be a dedicated ferry service between Oban and Castlebay – a service that would provide direct daily sailings from Oban and Castlebay, 7 days/week. Everyone in the group agreed that having a dedicated daily service would both increase the choice of travel for people and enable the local economy to flourish and businesses to prosper. The service should have its own dedicated vessel, capable of sailing in the waters it crosses. It was seen as unacceptable that the vessel is shared with e.g. Mull and a few concerns were raised in relation to the insufficient flexible capacity in the CalMac fleet. Overall, MV Clansman was considered as a better sea boat than MV Lord of the Isles. There was also a strong consensus that the vessel should be based on the island it serves. (It was noted that Barra was the only island that did not have 38

a vessel berthed on its land. Consultees noted that they were told Castlebay was not regarded as a safe harbour, but no explanation was given to them as to why that was the case). In terms of the crewing on the vessel it was suggested that the crew should live in the island’s community. Consultees also thought that it was important to increase the capacity on the ferry in summer, especially if RET was to stimulate the tourist demand. There was a strong opposition against the proposed Lochboisdale-Mallaig service should that exclude Barra’s connection with Oban. As most Barra residents travel to Oban or Glasgow as their end destination, the route to Mallaig was considered as a ‘non-starter’. It was noted that Mallaig can be accessed via the Lochmaddy-Uig route and the consequent Armadale-Mallaig route, although insufficient frequencies of the Armadale-Mallaig winter service caused connectivity issues. Integration - There was a general feeling that ferry services had little or no integration with other modes of public transport. Although Oban has regular bus and train services to and from Glasgow, the main difficulty is that buses and trains leave or arrive in Oban at the same time. This then limits the opportunities to integrate public transport with ferry arrivals and departures. In addition, the last public transport to depart Oban is at 18:00 however on certain days the ferry arrives after 18:00, meaning that no transport connection is available. This issue was amplified for the late afternoon summer ferry service from Barra that does not reach Oban until late at night, leaving ferry travellers with no public transport and difficulties finding affordable accommodation - often Bed and Breakfast accommodation in Oban would not accept guests who arrived so late in the evening. Also, the late arrival of the ferry to Barra (after 8pm and later if delayed due to bad weather) had implications for tourism – the availability of serving hot meals after 8pm on the island was limited. There were some issues raised with regard to the waiting time required in Oban, following disembarking of the Barra ferry. The ferry is scheduled to arrive in Oban at around 14:00. However no connecting public transport until 18:00 or available ‘left luggage’ facilities make the waiting time for passengers un-enjoyable. The group agreed that ports like Oban (and Mallaig) need to be treated as a ‘hub’. There seemed to be too much focus on access to Oban as an ‘end’ station. Not enough consideration is made of the integration with other modes of travel for the onward journey – i.e. many people travel far beyond Oban once they arrive there. This issue was further explained with regard to the idea of a ‘public transport window’ for Oban. – which is currently 11am to 6 pm if going to Oban from Central belt in the morning and leaving from Oban to Central belt in the evening (i.e. the first public transport to arrive at Oban is around 11am and the last transport leaves around 6pm; therefore a vessel based in Oban should not leave before 11am or 11.30 am and must arrive back before 6pm to make the public transport links). However, the idea of a public transport window for Oban is much wider – 8 am to 9 pm - which means that if a vessel was based in an island community, much earlier

departures can be arranged to integrate with the existing public transport on the mainland. There was a consensus among consultees that more sailings were required to and from the island. Especially in winter, the frequency of sailings was seen as unacceptable. Ideally, direct daily sailings should be introduced between Barra and Oban, with a dedicated vessel for the route. Some consultees noted there was a need for a release vessel for everybody. Currently if a sailing is cancelled, the community has to wait several days for the next scheduled service. There also seemed to be competition with other communities e.g. Coll/Tiree. Although there was a preference for an earlier sailing from Castlebay to enable earlier arrival to Glasgow, it was questioned whether a much earlier ferry departure from Barra would be suitable for families with small children. Some felt that facilities on board of the vessel had to be improved, especially for lengthy sailings like those to Oban. Comparisons were given to high facilities experienced onboard other European ferries. Some consultees noted that they had traditionally used the ferries, but recently they have decided to fly instead due to much shorter journey times and more convenience. There was also the option to travel daily i.e. when they needed. However, the cost of air fare was seen by some as a constraint to air travel and they would therefore opt to fly only for day-to day appointments (e.g. health/hospital appointments). Attendees reported on the long waiting times for connecting services in Oban. More of an issue however, was the lack of available left luggage facilities in Oban that inhibited people a more comfortable waiting time spent in Oban. A need for improved facilities in Mallaig was also highlighted. The integration of ferry arrivals and departures with buses on the island was thought that it could be much improved. Currently, buses on the island are primarily designed to serve schools and ‘anything else’ comes second. It was thought that the irregular ferry timetable constraints bus operators to integrate well with ferry times. However there was a feel that ferry travellers could easily ring a taxi if no buses were available There is a need to define minimum service levels (key part of lifeline definition) For Barra lifeline = min of 1 sailing each way per day, all year Service guarantee from government is essential. Integration of schedules between ferries (e.g. upon arrival in Barra continuation of journey across to Uist via Barra Sound needs to be assured) Grater frequency required. Barra hit hard if ferry cancelled. Happy with Oban as destination (Uses ferry probably once a month). Prefer direct service to Oban. Timings not good if a foot passenger

Fares With regards to a future fares system, there was general support for continuing with the distance-based Road Equivalent Tariff once the pilot finishes. There was a general consensus among the participants that (RET) was having a positive impact on the island’s economy. Instances were noted where accommodation bookings for the forthcoming summer were up by 20% in comparison to last year and there also seemed to be an increase in ferry bookings. It was questioned however whether the current slowdown in the economy had its role to play too i.e. encouraging people to undertake cheaper domestic holidays etc. It was felt that the real effects of RET could only be seen later, in a few years time. It was also felt that RET provided a more ‘transparent’ way of setting fares (i.e. simply based on distance travelled) as well as fares that were equal for all – both aspects very much welcomed by all participants. Nevertheless there was a feeling in the group that there should be further concessions for island residents. It was thought that RET did not bring any financial improvements to, for instance, agriculture (crofting) – in terms of reduced fares/concessions. Also, there was a feeling in the group that hauliers’ gained benefits from RET which were not being passed on in full to islanders e.g. in a form of reduced commodities in shops. Finally, it was agreed that lower fares alone would not necessarily deliver the benefits that islands needed to remain sustainable and promote greater economic growth and social well-being. Greater improvements to the ferries are also required through more frequent services and greater capacity to generate a transport system equivalent to the road or rail system on the mainland. In particular, the issue of a daily service to the mainland was raised and all felt strongly that being able to access the mainland on a daily basis was crucial for the long term sustainability of the island. Overall, the RET pilot was welcomed by everyone. It was thought that lower fares have had a positive impact on tourism on the island in particular. Some argued however that RET did not bring any real benefits for the community, including freight and hauliers. RET not helpful if multi ticket books used.

Vessels The service should have its own dedicated vessel, capable of sailing in the waters it crosses. It was seen as unacceptable that the vessel is shared with e.g. Mull and a few concerns were raised in relation to the insufficient flexible capacity in the CalMac fleet. Overall, MV Clansman was considered as a better sea boat than MV Lord of the Isles. vessel able to carry all types of vehicles (e.g. buses with three axles, HGV’s) plus passengers Ferries too big, prefer smaller fast ferries, 2 runs per day.

Ports & Harbours infrastructure No Comments

Port Operation & Ownership No Comments

Accessibility No Comments

Cost & Affordability No Comments

Funding Prefer to see SG fund and run RET.

Methods of Delivery & Operation Public sector is perceived as more accountable for delivery of ferry service Existing Barra ferry service is viewed as ‘pathetic’ and ‘dire’ (every 2 days in winter, and no sailing for 4-5 days when a sailing is cancelled) Sailing/arrival times even in summer are ‘all over the place’ – there is a need for consistency as with most other routes (i.e. fixed times of day for sailings and arrivals) Public ferry service is seen as “part of the community” (albeit this relates more to individual staff than operator per se) Barra route is considered to never be commercially viable, so always need subsidy Prefer the ferry to be based on island as this creates and maintains jobs on island Need for faster ship/service Dedicated ship built (optimized?) to route requirements Barra wants to grow tourism by 50% but can’t do that with current poor service (so current service level constrains economic development?) Tour buses cannot come in via Uig/Skye due to use of tri-axle vehicles so must come direct to Castlebay or Lochboisdale CalMac subsidy has doubled over recent years yet service still poor (‘not 21st century’) RET has not been publicised enough, especially to tourists in central belt Not happy boat used for relief for 3 months. Extra boat should be available.

Financial Incentives No Comments

Competition & Procurement Distinct Western Isles bundle may offer some advantage over big bundle Make integrated transport a part of next tender (bus and train links) Bidders should be allowed to bring in their own ships 42

Lifeline should mean: daily service year round as a minimum Sharing a ferry with Coll, Tiree and other islands is a problem for Barra Sailings need timed to meet local needs (e.g. morning sailings), not needs of operator Service has to be much more customer oriented than today South Uist can be served via Barra provided Eriskay ferry fare is included in price Preference for Oban as mainland port (passengers) Ferry never really carries over 350 persons – they max out on car capacity (so why use pax ship designed for 600+?) Catering with marine crew is “old hat” – should be outsourced

Freight Improved consolidation for freight Cost of pallet shipments to Barra is very high Need for improved freight consolidation Current ferry service is “not a service” – frequent cancellations and poor frequency hold back trade opportunities Service is now more or less weekly – it needs to be daily! Some preference for an integrated ferry operator (freight door-door) Preference for Mallaig as mainland port call - possibly 2 sailings/day there on a 2.5-hour crossing using dedicated ship Mallaig route has more weather protection – Oban route not protected after Mull Sound Road to Mallaig needs some improvements Fort William is a good retail centre, with good access via Mallaig Dedicated boat required, not one that is regularly lost to other routes Far more reliable ferry service is critical for island trade development Operator – public or private - does not matter so long as service improves Need for urgent improvement on Barra ferry otherwise ‘trade will disappear’ Fresh & frozen fish is now £5m turnover on Barra - 48 employees directly involved plus 7 fishing boats each with 4 jobs each, plus indirect impacts = 100+ jobs Ferry service is getting worse not better Possible daily rotation could serve both Barra and S. Uist with boat based in Barra, one schedule suggestion being e.g.: Barra-Mallaig-Lochboisdale- Mallaig-Barra (fixed times with boat staying over on Barra each night) RET not helpful with freight as savings not passed on. Although RET will help as tourist benefit. 43

Other The participants thought that it would be helpful to see the breakdown of the travel statistics for Oban-Castlebay route rather than having the figures combined with the Lochboisdale leg of the journey. There was a question whether a fixed link (between Uist and Skye) has been clearly examined. The group felt that RET should be more advertised The group felt that there were instances where, for example, traffic from Mull was prioritised over traffic from Barra which was considered unacceptable. Also there appeared to be competition between communities eg Lochboisdale and Coll/Tiree regarding better vessels/number of vessels serving the communities. Some consultees thought that other ferry services eg Mull-Oban had preferences before the Barra service and that was unfair. Questions on the definition of “lifeline” Clear tender requirements need to be established for Barra route: Level of service Sailing and arrival times Dedicated ship Safety of delivery, better reliability (e.g. use of weather windows instead of outright cancellation) Much better customer orientation (from the contracted operator) Clearer information and communication policies. Perception of Oban favouring Mull. Second linkspan not in use? Wrote to CalMac no response.

BENBECULA – 10th MARCH 2009

Routes, Services & Integration Services and Routes - The group felt that the existing frequency of sailings and the increasing number of service cancellations were detrimental to businesses (e.g. fishing) on the island. There was a consensus among participants that there should be a dedicated ferry service both from Lochboisdale and Lochmaddy provided 7 days/week. The issue of daily access to the mainland appeared to be the key issue for those attending the workshop. Daily sailings would enable people to carry out daily business on the mainland. Timetabling should enable islanders to leave Uist on Monday morning and return back on Friday evening. There was a need for businesses to get from ‘A to B’ as soon as possible, and the importance of a fast service was highlighted.

The group felt that both the current shared service with Tarbert (Tarbert- Lochmaddy-Uig) and with Castlebay (Lochboisdale-Castlebay-Oban) did not work and did not benefit either communities particularly well. It was felt that Uig had too much control over what was happening to Lochmaddy. Attendees also strongly felt that the proposed Lochboisdale – Mallaig service would be beneficial for the South Uist communities. There is a need for two vessels dedicated to each route. The vessel should be based on an island for benefits of people and businesses. It was felt that both Harris and Lewis had 2 ferry routes in a relatively close proximity - and that potentially the ferry from Stornoway to Ullapool can be accessed by people from Harris in a relatively short journey time of 45 min. Consultees wondered whether an overnight freight service from Lochmaddy could be introduced, thus using the capacity available at Lochmaddy. In terms of the routes - a Uist-Dunvegan route was suggested. It was noted that this service existed in the past, but it was acknowledged that the existing road condition to Portree may be an issue. There was a consensus among consultees that a possible Lochboisdale- Mallaig route would be more beneficial to people and businesses in Uist than the existing shared service with Castlebay, which did not benefit either communities particularly well. The existing Lochboisdale-Oban route via Castlebay was perceived as too long. Poor facilities (e.g. catering, no accommodation cabins) on the vessels employed on the route were also hindering the demand for the service as well as the lack of frequency and issues with cancelled sailings due to severe weather. Majority thought that there should also be a direct daily service from Castlebay to Oban to enable more travel to Glasgow and North England as well as short weekend breaks on the mainland. It was thought the Friday flights from Benbecula were full as no suitable ferry service was provided. One consultee would welcome more sailings (e.g. 2/week) to/from Tiree. It was noted if there could be a scope for an overnight ferry service from Castlebay to Oban, but acknowledged that a lack of cabins on vessel could be an issue. It was thought that the early sailing from Lochmaddy to Uig (07:30) suited the needs of local businesses as it enabled them to reach Inverness before lunchtime. However, this sailing was provided only 3 times per week. It was thought that the timetabling and public transport connections for the return leg of the journey were more of an issue, often requiring extra accommodation costs to be incurred. It was also thought that the proposed Lochboisdale – Mallaig service should be provided 1/day in winter and 2/day in summer, with a potential to stop at the Small Islands (Canna) on Friday (and enable children to get home from schools for the weekend). Most consultees noted that they were frequent ferry users, although some would recently choose to fly instead due to much shorter journey time and travel convenience to their final destination. Another reason was ‘having the

option to travel when needed’. However, the cost of air fare was seen by some as a constraint to air travel and they would therefore opt to fly only for day-to day appointments. Other routes e.g. Stornoway-Ullapool was perceived as good. Request to replace Lochboisdale – Oban with Lochboisdale – Mallaig (2.5hr short crossing instead of 7.5hr ‘endurance test’) Change Lochmaddy – Uig to Lochmaddy – Dunvegan (to give further tourist potential) Faster and more reliable services needed Government should licence route (via PSC) Four entrance points to Western Isles seen as essential (note: there are 5) Lochboisdale-Mallaig – need a dedicated ship – also faster ship Lochboisdale-Oban is not affordable with RET Pioneer did run on Mallaig-Lochboisdale route and showed it can be done Most problems are on Oban-Barra route – Mallaig-Lochboisdale is far shorter, can go north of Rhum, Canna for shelter etc – upgrade on Mallaig and make Barra-Eriskay ferry bigger More Barra people already using Uig-Lochmaddy so would use Lochboisdale- Mallaig especially if frequent Current Lochboisdale-Barra-Oban service not attractive for Lochboisdale or for Barra – this needs to change Prefer Lochboisdale – Mallaig, shorter and community wants this Would love to see Sunday sailings and would certainly use. Destinations are right. Looking, as an ideal, to have 2 boat shuttles, more frequent service. Integration - Consultees thought that there should be integrated/through ticketing for ferries which would enable a ‘through’ ticket, for example, on the Oban-Castlebay - Barra-Eriskay – Lochboisdale-Mallaig services. It was thought there was scope for better public transport integration in Oban. Public transport connections otherwise were considered sufficient and generally good public transport links were considered in Mallaig. Participants noted integration issues of the Mallaig - Armadale ferry service with the Uig- Lochmaddy service. It was thought that services on certain days integrated well, including intra- island ferries with the mainland ferries. Some public transport integration issues were noted at Oban, although most integration issues appeared at Uig. Suggestions for an express bus to key destinations from Uig was suggested. As most consultees would take their cars on a ferry, no real public transport integration issues were brought up. Currently services/ships are really a compromise for all user groups: 46

Business and freight Islanders Tourists At the moment these compromises don’t really suit anyone. In future there is a need to avoid too many compromises (e.g. via ship design and scheduling especially) Better integration of schedules between inter-isles and mainland ferries is needed to assure interconnection Integration with public transport today seems almost impossible to realise a trip Lochboisdale-Glasgow in one day when using only public transport Should be better integration of service Ullapool - Inverness.

Fares There was general support that a distance-based fares system should continue when the current Road Equivalent Tariff (RET) pilot finishes. There was a general consensus among the participants that RET has had, and will continue to have, a positive impact on the islands, although there were some concerns. Some consultees felt that RET was mainly beneficial to those with a car, others believed that hauliers had not passed reduced costs on to their final customer and were therefore not reflected in the general price of goods in shops on the island. It was acknowledged that there had to be more competition between island hauliers to drive down prices of carrying goods. Attendees noted that since RET there has been an increase in ferry usage. Especially the Lochmaddy-Uig route, which was experiencing increased car traffic and local business were finding it difficult to get on a ferry. Comments of an ‘unfair’ booking system, which could be detrimental to businesses if transporting perishables, were raised. At present, the booking system operates on a first come, first served basis i.e. whoever books first, but arrives for e.g. tenth at the terminal may not get on a ferry. No information about who has booked and cancelled the ferry, and the resulting available capacity on the ferry, was provided to travellers. Despite the increased ferry travel, it was thought by some that RET had not increased the demand for accommodation on the island – hotels had spare capacity and were running at 30% of annual occupancy levels in Uists, and at around 50% in Harris and Lewis. The participants believed that RET should be on intra island routes too as otherwise it was distorting the impacts of the pilot. The group commented that there was no advertising of RET and tourists were not aware of it. Issues regarding coach fares were noted - coaches in ‘over 10m’ length category were thought to be considerably more expensive than coaches in the preceding category. The rationale behind the price difference was believed to be extra charges for passenger seats that were calculated in the price irrespective any passengers travelling on the coach. This was thought as unfair. 47

Overall, the RET pilot was welcomed by everyone. It was thought that RET has increased demand for ferries by making them more affordable. Some thought however that RET did not bring any real benefits for the community in terms of reduced commodities in shops etc and that hauliers were those who benefited most. It was thought that even though RET brought a reduction in fares, cost of travel due to insufficient timetable and transport integration were still high. Often people would need to spend extra for accommodation on the mainland Interisland ferries should be part of RET RET welcome, have family on the mainland.

Vessels Some consultees raised the issue of car parking on a ferry. The current layout does not allow access out of either bigger cars or for disabled people. Question asked why Orkney “Pentalina”-type ship cannot operate on Western Isles. Staff have familiarity with ships and “ships are excellent” Need larger car ferry on Barra-Eriskay and a new ship for Lochboisdale- Mallaig. Barra should feed into Lochboisdale service via Eriskay ferry Catamarans are no good on the Minch Bigger ship needed to replace Sound of Harris ship Need interoperable ships – and local crews Capacity issues on Lochmaddy run. Good seating, food expensive, fit for purpose

Ports & Harbours infrastructure Consultees felt that Uig port was in a need of improvement if it was to handle an increase in traffic. Concerns were raised that there were no intentions of the Highland Council to undertake any improvements to the port Lochboisdale-Mallaig - There is a big development proposed on a site opposite to Lochboisdale port. The area, enabling 8m of water at a low tide, aspires to become a ‘Trust owned’ port with the biggest facilities on the island, enabling to handle variety of traffic. The area is planned to be developed into a marina surrounded by housing. Need redeveloped harbour – shallowest draft at Lochboisdale Time now for operator to look at how other places operate and new vessels – CalMac has ‘shoe-box’ type ships built for shallow draft and Lochboisdale is the key depth constraint in the system – so need to build deeper berth there Need to look at infras to handle ships – Lochboisdale needs built into contract

Port Operation & Ownership It was thought that having one owner for the port infrastructure would create efficiencies and standards to be made. At the moment there are a number of 48

owners of harbours. One owner could benefit from economies of scale and also introduce common standards Piers should be owned by one entity

Accessibility No Comments

Cost & Affordability Ways of reducing costs - Consultees noted ideas of ways to reduce costs which included: reduced fares (which would lead to an increase in demand); further investment to increase the vessel speed and frequency; crew to be based on the island; reduce bureaucracy and be more flexible (there is a perception that CalMac have too much bureaucracy behind operation and that is could be more commercially astute); and Reducing crewing costs and look at aviation for examples of good practice.

Funding Services will not be attractive to private sector anyway Private operators will forsake unprofitable routes (not if they are contracted and subsidised)

Methods of Delivery & Operation Public ownership of route considered important (under PSC) However downside of this is slow change, limited service and slow fleet renewal Island communities want to be involved in future tenders (e.g. via Council): want to help select bidders want to help set an improved specification Type of operator and ship provider not important as long as service level is assured. Type of operator does not matter as long as adequate ship fleet and level of service can be established and guaranteed Existing operator “is good” and we should continue with state service Fragmented service if big bundle is broken up Community operator is another option (for single route maybe) Faster speed/lower journey time is key to developing traffic, as is higher frequency Would prefer to see services remaining with CalMac and longer routes.

Financial Incentives Need standardisation of ports and interoperability of ships so that cover is available in a smaller WI bundle Crew costs too high/ship passenger capacity too great (wrong ship for the route) New spec should look to secure a ship better optimised for the route Piers should be owned by one entity Must develop ways/incentives to make tenders attractive to other bidders

Competition & Procurement Distinct Western Isles bundle could be possible Smaller bundle could mean avoiding intense competition with other island areas for relief vessel if it is part of a small bundle offer May be superior ability of ships to swap within small bundle Smaller bundle may be more attractive for bidders – leading to more competition in tenders and better offers received Support for a big bundle “to avoid cherry picking” Regional bundle might be ok – e.g. a specific Western Isles bundle (Barra- Lewis range) Some people scared of tender process/scared of change

Freight Dedicated freight service good – takes freight off daytime.

Other Consultees believed that new ferry services and frequency could generate its own demand. The example of the inter island routes was given where there were concerns about insufficient levels of demand before they were introduced, but very quickly additional capacity was required when the new services started. It was suggested therefore that once new services were introduced then demand would follow as activity increased around the new service. It was also felt that the word ‘lifeline’ ferry generated a wrong perception. It was felt that ‘lifeline’ was the same as ‘minimum required’ and that was what the islands received. Some consultees raised the issue of car parking on a ferry. The current layout does not allow access out of either bigger cars or for disabled people. It was also felt that a better booking system should be put in place and instances were noted of not being able to get on a ferry. Tiredness from consultations – general feeling that people are consulted but then are left alone/ignored CalMac is important employer on the island, other operator might affect this. However, if wider economic benefits of change outweigh this, public will be 50

behind changes. Employment opportunities are essential for the future of island communities. Scandinavian services are seen as benchmark Close relationship between Scottish Government Ferries Division and CalMac was questioned Æ “Does the current set up allow for change?” Interisland ferries should be part of RET Uses the plane 5 or 6 times pa. Flies to mainland if going further than Glasgow. Use inter island services with work Use air less and less because of security. STORNOWAY – 11th MARCH 2009

Routes, Services & Integration Services and Routes Consultees felt that even though they had a twice daily, six days per week service between Stornoway and Ullapool, the service seemed to be mainly driven by industry (CalMac’s operational needs) rather than a service that meets the needs and requirements of users. This was reinforced by some noting a lack of available customer surveys seeking peoples’ opinions – need to be more customer focused. Attendees also highlighted the issues with both service reliability on the Minch (the number of cancelled sailings due to weather is increasing) and health and safety onboard vessels (e.g. when crossing the Minch). There has been a strong desire to have a Saturday late night sailing from the mainland. This would enable islanders to participate in sport activities on the mainland during the day and return back home in the evening, without incurring substantial accommodation costs. A general issue of Sunday sailings was raised, with some stakeholders for and others against them. An alternative route to Gairloch was suggested, which would enable an hour shorter crossing to the existing route to Ullapool. Overall, it was felt that the standard of vessels should be improved. There was a growing concern among the public about the reliability of the Stornoway-Ullapool service. (The number of cancelled sailings has increased). It was felt that the Tarbert-Uig service was more reliable and should be maintained. At the same time, the public thought that the vessel employed on the route was part of the problem of cancelled sailings. There was a consensus among the public that vessels serving the island should be designed for the waters they cross. Some thought that the existing vessel was underpowered, lacked capacity and was uncomfortable. There was a lively discussion with regard to the Sunday sailings. Six out of seven people interviewed were pro Sunday sailings. The public felt it was important to have at least one sailing per day on Sundays all year round, 51

particularly if people needed to leave the island urgently. The sailing could be scheduled for late afternoon from the island, to enable visitors to get to the mainland, as well as to enable residents to access appointments scheduled for Monday morning. Instances were noted of Monday sailings being too full due to insufficient weekend service. Some consultees also felt that the current timetable did not enable them to access the mainland for the weekend. A service that would allow families to leave Stornoway on Friday after work and return back on Sunday evening would give people more chance to travel - to visit relatives, undertake short weekend breaks on the mainland etc. Some thought that three sailings per day (AM, lunchtime and PM) were needed. There is a strong need for a late Saturday sailing from the mainland. Although some thought that a late Saturday sailing would not be useful for families with small children, the sailing would be important for those travelling to and from sport competitions on the mainland. Currently, island residents are unable to take part in sports events unless they can afford two night’s accommodation on the mainland i.e. they can’t come back until Monday. All consultees thought that the current routes and port locations suited their needs. There was a feeling that the proposed Lochboisdale – Mallaig route, as a shorter crossing, would open new business and tourist potential for Uist. Current service is not meeting the needs of many (nobody said the service was acceptable, as it stands today) 2 daily sailings each way (3+ in summer) seen as minimum High interest in later evening sailings from Ullapool, especially Saturday nights, for sports trips, shopping, hospital visits etc. An 8.00 pm sailing required (to some sports groups this has been an issue for over 10 years, and subject to 2 surveys) Later evening sailing in general during the week would also allow for more daytrips and business trips to mainland Some interest in Sunday sailings – however opposition group to Sunday sailings exists (main argument is uniqueness of Stornoway) Complaints that passenger ferry steams too slow (need faster, cheaper, and more frequent service) Harris Sound ferry seen as beneficial, but needs better service (frequency, timings) Would like to see Sunday sailings. Would use it. Winter - 2 per day plus one on Sunday - Summer - 3rd occasionally Frequency fine if ran to timetable. Happy and reliable. Great service Good frequency for shopping trip. Happy with Ullapool. Important to have ferry for car, for short notice because of price of air Benefits of a quiet Sunday outweigh the need for a Sunday sailing.

Late Saturday sailing. Object to Sunday. Frequency and timing good during week. Weekends could improve - need a late night Saturday service for sports shoppers full day in Inverness Happy with Ullapool - Would enable Saturday return trips. Does not see benefit of Sunday sailings - would object - see no economic benefit (HIE background), not just the moral issue, but is a moral issue too. Stornoway – Ullapool ferry service. Good increased capacity due to freight ferry. Great improved service. Excellent service from CalMac, beyond question. Member of public goes to Ullapool 3 or 4 times a week for 40 years. Could be more services. To reduce number of overnight stays required. Three a day sailing is excellent. Could control any side effect. Late Saturday night sailing. 2 members of public strongly opposed to Sunday sailings and long term effects on island. Do not want shops open on Sunday. All ages, youth on island opposed to Sunday sailings. Generally - service is good at the moment. Perhaps could provide something if delayed due to weather. To Inverness from Ullapool. Against Sunday sailings - to keep island culture. Does not want to share surf with more surfers. Happy with service - frequency and destination. Main issue is need for Sunday sailings. Believe it works against family with school-age children and prevents them visiting the mainland and having people visit them. Also believe it is holding back tourism. Wants equality with other islands who can travel on a Sunday. Want more services between Tarbert & Uig in the winter. Would like to see extended sailings throughout the day as well as 7 day sailings Want the last departure of the service from Ullapool later on a Saturday. The timetable has always prevented people and sports clubs i.e. golf club, from taking part in competitions on the mainland and prevented mainland clubs etc coming to the islands. This means young people will never be able to progress. Keen to see more golf tourism and believe the roads and ferries are vital in encouraging this. Would like to see 7 day sailings. It is an issue of equality. Ferries are very important to the islands. The lack of 7 days sailings are having a detrimental effect on the economy of the islands, chasing young people away and as a result talent is being lost.

Sailings on a Sunday would help from a social point of view in that it would make it easier to visit the mainland for a weekend and also allow people from the mainland to visit the islands. Puzzled at what criteria CalMac applied to allow the Tarbert/Lochmaddy-Uig sailings but still prevents the Sunday services from Stornoway to Ullapool. Surely the economic case for the latter is far greater than the former. Want Sunday sailings in the summer. This is the “only place in the world” that prevents people travelling in this way. The crews are there anyway to provide the service. Local swimming club cannot attract visiting clubs for competitions due to the lack of a late sailing on Saturdays. Would like ship to delay afternoon departure ex Stornoway. This would allow teams to travel over Friday or Saturday morning and leave around 1600 on Saturday. Would allow club to attend mainland competitions. Current situation is hindering development of members. Issue is Sunday sailings. Unacceptable that ferry doesn’t run on Sunday – even one crossing in afternoon. Feels dictated to. Should have freedom of choice. Cannot travel to mainland to visit Mother and Mother cannot travel to Stornoway to visit grandchildren. Sunday sailings. Needs sailing on Sunday to avoid missing work. There should be freedom of choice In favour of Sunday sailings. Later sailings all week (2100 ex Ullapool) Good service. Island is well served. Mainly uses Harris/Uig service for family reasons (short crossing, children etc). Improved frequency of sailings would be beneficial. Positive about Sunday sailings – freedom of choice. Service is good. No need for Sabbath sailing. Late sailing on Saturday (2100 ex Ullapool) would cater for all needs – sports etc. Must have Sunday sailings for Visiting family and friends. Considering leaving Island (after 25+ years) if current situation persists Late Saturday sailing would be of no benefit Must have freedom of choice Late sailings on Saturday – 1600/1700 ex Stornoway, 2100 ex Ullapool (Ladies football tournament). Would attract more visiting clubs if they could leave on Saturday afternoon (1600). Not in favour of Sunday sailings Peak summer late sailings should be extended for whole season Late ferry on Saturday to help sports - Weekday times OK

No opinion on Sunday sailing Wed & Fri late sailings in summer are good – should be extended for whole season - Late Saturday sailing Not in favour of Sunday sailings Good service – happy with CalMac Service is very good Later sailings on Saturdays for sports fixtures, travel to conferences, shopping etc. No Sunday sailings. No real requirement. Too controversial. Would split community. No Sunday ferries between Stornoway and Ullapool. In favour of a late evening ferry on a Saturday to accommodate the Sports Clubs. At present they cannot compete on the mainland, if they do they can’t get back till Monday. (Post note: the SRU pay for Highland Airways to fly rugby teams to and from mainland.) Later sailings for Rugby, Football and Athletics later Saturday evenings. To accomplish this would want a minimum stay in Stornoway of 3 hours and leaving Ullapool at 7.30 pm or 8.00 pm. Wants to see the introduction of Sunday sailings. The reason for this is being able to see the family on the mainland and to have visitors over at weekends. Satisfied with the present service and enjoys the macaroni and cheese onboard the Isle of Lewis. Want to see the introduction of Sunday sailings, preferably pm. If Sunday sailings are not introduced soon will consider leaving the island, has a child that requires hospital treatment in Inverness and at present they have to come back on a Monday. Requires Sunday ferry as unable to go away for the weekend as have to be at work on a Monday. It would be a benefit for family as his daughter is in Glasgow and son is soon going to university. Desperate for Sunday sailings for both family and business reasons and it would also benefit the economy of the island Would like Sunday ferries for family and business reasons. For Sunday ferries for family reasons and also thought that it benefit tourism. Require Sunday sailings for business to give a weekend on the island, for a business meeting on a Monday morning have to leave the island on Saturday. Can’t travel on a Monday morning as the sailings from Ullapool as they are fully booked to the island, some ferries from the island are similar. Pleased with the present service but would like it extended at the weekends, would welcome Sunday sailings and later sailings on a Saturday. 9 of 10 people who spoke with Scottish Government official want Sunday sailings.

Western Isle businesses not able to travel to Barra and return the same day. Overnight stay increases costs. No Sunday sailings means that for a Monday am start people and businesses must leave Saturday. There should also be a later Saturday sailing. Current services and routes OK but 7 day sailing required Ferries OK in summer but uncomfortable in rough/winter weather.

Integration It was believed that the issue of public transport leaving when customers are disembarking a vessel was down to ‘common sense’ – i.e. a bus/train should not leave in such situations. It was acknowledged though that public transport waiting for late ferry passengers may have a knock-on effect elsewhere and it was felt that gaps between connecting/integrating services might be too tight. While the participants thought that buses on the island integrated well with ferry departures and arrivals, some integration issues were noted in Ullapool, including too long (45 min) boarding time. Some stakeholders thought that ferries should have/be part of an integrated/through ticketing system and suggestions for Oyster ticket type system were made. No real issues with PT integration were noted in Ullapool. The public often mentioned a lack of public transport integration at Uig. Integration with buses at Ullapool acceptable but bus integration needs to be part of contract Good integration Good bus links (Citilink) to Inverness usually alright. Stirling. Concerned about connectivity with bus/rail services. Bus connections must be preserved Husband arrives in Inverness on the train (sleeper) at 8.30 am but the bus leaves Inverness for Ullapool at 8.00 am and therefore can’t get the morning sailing to Stornoway. If going off Lewis on a Sunday there was not enough time to catch the Lochmaddy vessel from Berneray as there was only 10 minutes to get from Berneray to Lochmaddy.

Fares There was a general consensus among the participants that the principle of a Road Equivalent Tariff (RET) was good and welcome, and that it would have a positive impact on the island’s economy. It was therefore agreed that a distance-based fares system should remain after the pilot study was completed. However, the group argued that some anomalies existed within the RET including wrongly set prices for commercial vehicles (60p rather than 40p) and lost concessions for freight.

The group commented that further ‘tweaks’ were needed for the community to gain further benefits from RET. Examples of hauliers not passing on the gained benefits to the community were highlighted, as well as worries of big mainland-based companies (e.g. heating oil/petrol business) coming over to the island and overtaking small local businesses. The group noted that no RET was introduced on the intra-island routes which was thought to be distorting the impacts of the pilot. Some participants wondered what was to happen after the RET pilot and what consequences there would be should it be abandoned. There was a feeling that an RET presented an opportunity for the Western Isles to ‘catch up’ with the Orkneys and Shetlands. Although an RET would encourage demand, stakeholders agreed that ‘cheaper fares’ on their own cannot deliver all. A lot more needs to be done. Holidays to the Hebrides are still expensive, although the travel became slightly cheaper with an RET. In terms of the real impact of an RET on the islands, attendees believed that results can only be analysed later on, in a few years time when for instance, the ‘economic crisis’ is taken out of the equation. Lastly, it was thought by some that concessions for ferry passengers over 60 years of age (getting two return trips per annum free) were insufficient. There was a concern expressed by some that RET may lead to capacity constraints on certain sailings in the summer months, with key business users being unable to book a place on the ferry. RET may therefore lead to requirements for additional capacity. The public welcomed RET. It was thought that an RET brought benefits to all, although some argued that RET fares for haulage companies were not set well. Previously freight was benefiting from other concessions which were lost under RET. It was thought that RET would generate tourist demand which may put pressure on the capacity of current vessels serving the island. Instances of increased car demand were observed on the Tarbert-Uig route, especially in summer. An idea of an airline style booking system for ferries was suggested – having cheaper fares the earlier the booking is made, for instance. Some residents noted that although they welcomed RET, they were unable to benefit from the reduced fares due to unsuitable ferry timetables. There was concern from a member of public that there wasn’t any available baseline study for RET. It was thought that if RET was to bring benefits only to tourism, then it would be insufficient. 10m minibus is charged more than a 10m motor-home (this discriminates against sports groups, kids etc, why?) RET has had positive impact on travelling opportunities for passengers RET made a difference. Not using more often but encouraged others to come. RET means people definitely consider a visit now. Use ferry because cheaper than plane 57

Welcomes RET Welcomes RET but has concerns that because there is no way of recording people who try to book online but are told the ferry is fully, that this could be adversely affecting the stats provided for the pilot study. (Point is we can count vehicles which are turned away at a port, but not those who are “turned away” on-line) Pleased with RET. Likes RET. Everyone benefits. RET is good >60’s Concession scheme is good. RET – better but not fantastic. Not much of a reduction compared with multi- jny ticket More discounts for teenagers. (Young Scot?) Delighted with RET as with the family travelling it makes it considerably easier. Delighted with RET and it has made a difference to travelling with a family. RET was good. RET of great benefit and should be continued. Fare structure for vehicles over 5m should be adjusted. There should be an intermediate commercial rate

Vessels Overall, it was felt that the standard of vessels should be improved Hebrides and Clansman comfortable 12 year old vessel not good in bad weather. Freight vessel too old. Fit for purpose for route. Reliability - need a boat that can sail in worse weather. Might use if faster, but not if meant felt ill! Facilities for children - stair danger - soft play monitoring The Isle of Lewis is not comfortable and finds it difficult to sleep on board. Prefers the MV Hebrides which is more comfortable. Believe the MV Muirneag should be replaced with another freight vessel as there is a worry that without it freight vessels would take over the available space on the MV Isle of Lewis. The MV Hebrides was a better sea-going vessel than the MV Isle of Lewis. A bigger vessel on the Stornoway-Ullapool route or two vessels. Concerns about the reliability of current vessels. Happy with the state of the vessels. Ship (Isle of Lewis) is noisy 58

Isle of Lewis design – noisy, poor sea keeping - New ship should be bigger and faster. Ships are comfortable The Isle of Lewis is a good ship but the Muirneag is not. Asked about areas or cabins for those with sea sick who wish to lie down. It would be better if the ship was faster. The reclining seats on the Isle of Lewis don’t fully recline for comfort. Toilets should have bowls for those with sea-sickness.

Ports & Harbours infrastructure It was noted that Stornoway Harbour had restrictions in terms of boats it could accommodate. It was also noted that No.2 pier, which handles dangerous goods was coming to the end of its life and No.1 pier was in a need of strengthening. There was a need for further berthing at Arnish point. It was suggested that as part of development package for Arnish point, the area could be developed into a freight terminal, handling all freight traffic, as well as helping to release existing freight traffic from Stornoway’s town centre. Stornoway needs investments. Piers. Happy with Ullapool. Generally on to Inverness, and good road to Inverness. Not really concerned about the location of the mainland port but likes shorter crossing. Length of drive on mainland not an issue.

Port Operation & Ownership Current STAG instigated by Port Authority regarding shore provision. Was not vessel that instigated. 12 year old vessel not good in bad weather. Freight vessel too old.

Accessibility Facilities for children - stair danger - soft play monitoring

Cost & Affordability Ways of Reducing Costs - Consultees noted ideas of ways to reduce costs which included: shorter routes; improvement of commercial/customer awareness by the operator (CalMac) and improved promotion (especially in winter); and to offer the ‘best value for money’

Funding No sports sponsorship by CalMac (unlike NorthLink)

Methods of Delivery & Operation The group felt that the operator (CalMac) had a lack of understanding of how the customer market worked - i.e. not enough effort seemed to be concentrated on the customer. It was believed that NorthLink was better in putting the customer first. Future services need far more customer focus than today Service should be run like a business Services needs to be responsive to user needs (using weather windows) Reliability is key factor Public or private operation is not an issue as long as service meets set requirements “What we need is political will to change” Current public sector operator is not customer focused Private operator is thought to be accountable to shareholders and seek profit, with 6-year contract offering safeguards for users PPP might offer better value – with ferry service run more as a business Current perception is that the contracted ferry operator runs things to suit itself, not its customers. “It’s not competitive and not responsive” – CalMac is “set in their ways” Ships “not fit for the Minch” in terms of reliability In past times even smaller ships still sailed in bad weather – today’s bigger ships tend not to sail in adverse weather Need better, and preferably faster ships Organisation and coordination of freight and passenger car traffic (co-modality option should be organised better) Poor reliability of freight roro service affects passenger ferry (car deck space competition when roro is cancelled) CalMac not perceived as responsive or customer focused Some perception that Stornoway-Ullapool route could be profitable, if operated and managed better Quality of food - cannot fault it. Some innovation would be good. Fresh local produce on ferries - fresh fish. Reliability is an issue. Both mechanical breakdown and weather. Old boat sailed more often. Is this boat suitable? Think CalMac could be more assertive in providing what people want. Major concern is the prospect of the private sector taking over CalMac routes. Feel safe on CalMac vessels as know that the crew know the ships and the routes on which they operate. Worry about the competence of crews which the private sector would use. Suggests we should consider sharing vessels with other parts of the world. 60

Services should not be put out to tender Reliability – suspicious about cancellations in Jan and Feb (usually Mondays) The food could have lower prices, there was no vegetarian option for breakfast on the menu. Breakfasts were greasy. Should be advertising ginger and lemon tea to alleviate seasickness.

Financial Incentives Current operator has no incentive to change or improve the service

Competition & Procurement Debundling is seen as important to users (either single Route or Western Isles bundle) Local businesses may be interested in tendering (e.g. as shareholders – investors) Key factor: set clear requirements in future service specification Freight revenues are very important for Stornoway-Ullapool route Security for users via contract and subsidy (6 years) – public/private operator is not an issue Currently services are a compromise for all user groups: Business and freight Islanders Tourists In future avoid compromises (e.g. ship design, scheduling, customer service) No incentive for present operator to change or improve service Standardisation of ports (for Western isles Bundle) Interoperability of ships (for Western Isles bundle) Port investment linked to contract Current ships not fit for Minch – need for more reliable and faster ships Scheduling of sailings need improved to allow better market access (current sailing schedule inhibits competiveness and economic growth?) Develop further ways to make tenders attractive to bidders Private operator selected should be able to bring in own ships if preferred Type of operator (public or private) does not matter as long as adequate fleet and level of service can be established and guaranteed Better service spec needs to be established for future tenders Council and key local stakeholders could help draw up spec and be part of operator selection panel with Government. Single bundle is best way to contract the routes. More flexibility and provides back up arrangements.

Freight It was noted that although there were issues with the existing freight vessel Muirneag (unreliable, uncomfortable), a dedicated freight vessel was important for businesses on the island. Suppressed demand under present service structure (trade constrained) Reliable service would help increase trade – ferry has trade development function 2 vessels/ropax preferred – evening and morning departures at both ends, max 2.5 hours trip time Current trip time is 3.5 hours which is too long for a 42nm trip – 2.5 hrs is easily possible with modern ships Advanced booking systems required as current system is too manual/slow/outdated Need more chip and pin options – ‘CalMac not up to speed with technology’ Costs an HGV £280 extra for a trip via Uig for the additional road journey RET helps sea freight costs a bit - but sea-freight accounts for just 8% of door-door haulage costs, so RET not that big a deal. And as volume discounts were removed, there is little overall difference with RET. Need for port investment in Stornoway/extra parking for trailers Hauliers prefer to send unaccompanied trailers Business carriers assume the burden and risk resulting from current poor ferry service Crewing arrangements questionable, ‘they need modernised’ Scottish Government should remain as contractor for ferry services Muirneag is not in the contract so poor reliability does not show up in official figures Participation of state operator at stakeholder meetings inhibits openness of (freight) participants Freight growth trend was upward until the recession, but long-term expect freight to increase due to extra tourism and building trade activity Need reliability, sufficient capacity and frequency – ideally a minimum of 3-4 sailings/day each way Increases in capacity and frequency would increase demand (for freight as well as passengers) Need for more flexibility on crewing arrangements as this restricts scope for improved services Current ships don’t even try to get across in bad weather (unless W. Isles based crew want to get back to the island!) Bulk fuel transport should be included as a lifeline service

Current service spec is not fully meeting needs – key thing in future is to properly set the service spec and get operators to bid based on meeting or exceeding that spec Reliability needed now. Last week Ullapool. First night breakdown and paid for. Second night weather. Perishables in and out. Use local hauliers. Frequency is fine. It is the reliability - need a new freight vessel. Flights - flies for business. Same day. Once a month for Inverness/Glasgow mainly. Good increased capacity due to freight ferry. Great improved service. Business and employment depends on getting product out. If cannot get out at end of week due to weather would be huge benefit to get out on Sunday. Believes could do this without impinging on others. Want to retain a separate freight service. Want freight to be kept separate. Concerned about reliability of freight vessel. Can’t get samples etc away to Inverness for lab testing. Otherwise service is good.

Other It was suggested that there should be consultations specifically targeted at young people. The island is experiencing depopulation and it is important that young people do not leave the island because of insufficient transport links. Preference to use ferry. Air travel in emergency or where cannot sail back on Sunday. Air service is great if not using ferry service. Prefers to fly - Glasgow -if alone plus know in advance. Would use ferry if in a group - 2-3 times per year youth group. Mainly fly - 4/7 times a year plus (consult with young people through Nicholson's school. Quite often use ferry) Travelling down and through Skye. Currently travels seldom that way because roads treacherous.. Concerns about Uig and the state of roads in Skye Concerned about the heavy fuel on Isle of Lewis as there is more smoke coming out the funnels. Also he was concerned that when the new legislation on pollution applies from 2002 will stop the vessel or we will have to convert her back to marine gas oil. Staff in the ports and ships is very helpful. The staff in Stornoway have been particularly helpful with the Aid to Eastern Europe To promote road shows - Isles FM - Gaelic Radio - Stornoway Gazette and other local papers - Council website

TARBERT – 12th MARCH 2009

Routes, Services & Integration Very happy with the service, especially with the staff in the office and the ship. Not bothered about a Sunday service, as would not use it. Supporter of Sunday services. In favour of Sunday Ferries Better winter timetable to Skye Daily service between Tarbert and Uig, all the year round. Better Winter Service i.e. daily service to and from Tarbert with increased frequency Parity of service in Summer and Winter – daily and for 7 days – as population is dying on its feet Needs daily service dedicated to one route. Not feasible sharing service between 3 ports (Uig, Lochmaddy, Tarbert) 7 day service needed. Businesses and local economy being disadvantaged. It’s daft to be doing repositioning runs on a Sunday and not be taking passengers. CalMac is losing out on revenue. Wants 7 day sailings – Why can’t they have parity with others on the islands who get Sunday sailings? Decision not to sail is cloaked in hypocrisy and nonsense. Doesn’t represent views on the ground. Better winter service required. Sunday sailings should be introduced In summer there should be a Skye/Harris and return available. Comment made that the ferry does sail on a Sunday without passengers to be in position for Monday am

Fares At present travel across the Sound of Harris on Thursday with no RET RET is making a difference. RET is good for passengers but hauliers are failing to pass on savings so they have started taking their own vans over. Unhappy at loss of multi-journey tickets. Happy with cost – issue is loss of convenience. Company now has more purchase orders to process as a result. Would also prefer longer validity of tickets to up to a year from purchase RET good but businesses should pass on savings

Vessels Very happy with the ship. Ships and Tarbert staff first class.

Better facilities on board – need an upgrade Need a reliable vessel on the route. Believes dice is loaded against this happening by CalMac Current vessels good, food good. Feel the MV Muirneag and MV Isle of Lewis are not as reliable as their predecessors.

Ports & Harbours infrastructure Would like to see Dun vegan developed for the port to the Uists. Dunvegan should not be considered as a port. In a westerly wind Uig is difficult and another linkspan should be built

Port Operation & Ownership No comments

Accessibility No comments

Cost & Affordability No comments

Funding No comments

Methods of Delivery & Operation Very happy with the staff in the office. Very happy with the staff in Tarbert. Ships and Tarbert staff first class. Current vessels good, food good. In summer when Ferries are busy space should be kept for locals in an emergency

Financial Incentives No comments

Competition & Procurement No comments

Freight RET is good for passengers but hauliers are failing to pass on savings so they have started taking their own vans over. Wonders with the livestock concession could be applied to live smolts being transferred to fish farms from hatchery. Applies to other forms of livestock – why not live fish?

Freight services on Tarbert Uig should be promoted.

Other Too many Camper vans. Look for ways to restrict their access to the island. Would like to see more information on boats about the things and places you see as you sail past, suggests leaflets for passengers.

KIRKWALL 18th March 2009

Routes, Services & Integration John O’ Groats Ferries has been running the Orkney Bus scheduled service from Inverness to Orkney since 1993 which links in with the ferry at John O’ Groats. This is run as a commercial operation with no subsidy. Making changes/improvements to the subsidised external ferry services can have significant impact on the commercial operators. Re-routing of internal ferries. Shapinsay could be used as a hub for the Northern Isles. There is currently no way to get to Westray via the islands, have to go via Kirkwall. More inter-island ferry services would encourage tourism. People are thought to be against a Flotta – Stromness ferry as they don’t want any more sea time. Options for external services: Orkney could be used as a land bridge from Shetland to mainland Scotland. A ship could be taken off at Lerwick and travel to Hatston, go back to Lerwick at 3pm and onward to Aberdeen at 9pm travelling overnight. This would provide a day route to Shetland and would link Orkney and Shetland. Be of particular benefit to tourism. It would allow passengers to come off the Shetland crossing and onto the 16:45 sailing from Stromness to Scrabster. A northbound leg could operate out of Scrabster in the morning and link up with the (proposed) 3pm sailing to Shetland. This would be of particular advantage for coach parties, would free up cabin space, and would mean no overnight crossing to Shetland. The above schedule could operate Tu, Th, Sa in summer only. There is currently no incentive to provide such a crossing under the present contract. Rail. Integration could be improved between ferries and the rail line at Thurso, although it was acknowledged that it’s very difficult to influence rail timetables. A good railhead serving Scrabster would improve options for freight getting to the central belt.

Fares RET. The issue of Road Equivalent Tariff was raised. RET would work out cheaper for certain routes in Orkney but not for the longer Kirkwall to Aberdeen ferry crossing. Demand. There is a danger that we talk about ‘passengers’ casually. Islanders are very different to tourists in terms of their needs, schedules, facilities. The NorthLink service has been viewed as too fancy for islanders 66

but this level of investment is necessary to make it attractive to tourists. The crossing has to be a positive part of the visitor experience and all aspects (vessel, waiting environment etc) has to enhance the overall holiday. This is often overlooked when looking at fares. No work has yet been undertaken looking at elasticity of demand and impact on the visitor market. It is necessary to know how a drop in fare impacts on demand, and at what point do you price people off the ferry and onto air services. Work of this nature was done around 20 years ago but there is a need to update this. There is very little price flexibility within the current contract which doesn’t enable you to do things such as price off excess demand in the peak periods. Fares structures. Each island community has different fare systems. Internal fares are discouraging visitors. Books of discount tickets must be pre- purchased and this is a huge expense for those commuting from the islands. Why can’t residents receive a discount to the same level on the boat instead? It was felt that there should be an integrated ticketing initiative (‘visitor bounty’) to bundle internal ferry fares with external fares in order to get visitors to use the internal ferries as part of their trip. There would be scope for increasing growth if prices are packaged and promoted properly.

Vessels The sailings which run to the Northern Orkney Isles require a different class of vessel as they’re operating in open water. The council has to support these boats from their own funds and it is felt this is unfair given that no other local authority has the burden of budgeting for vessels of this nature. Scope to take these services out of GAE funding and receive funding direct from the government? To note that new vessels are lifeline assets No prototypes, new vessels should use tried and tested technology, but with an eye on the future, must be reliable Use reliable propulsion systems No “end of line” machinery used in new vessels EU Procurement procedures – does this cause restrictions on public bodies and with the possibility of unsupported equipment being used. Concept of VESCO – a good thing although concerns over local input (i.e.: the need of it and it may be overlooked) and the operator / asset owner split in specify vessels etc Standardisation of vessels & infrastructure in general a good thing Must have joined up thinking – between the shore and sea infrastructure Ability to have a relief / backup pool of vessels possible with a more standard vessel. Significant cost savings in using standard designs

Ports & Harbours infrastructure Ports. The crossings to Stronsay and North Ronaldsay don’t go to the most convenient places for the islands. 67

Possible problems in persuading the Scottish Government about the benefits and importance of joined up thinking and an initial principle of spend to save. Concerns expressed that the Single Outcome Agreement means that the “old” piers and harbours grants are no longer available Concern that the through life costs of linkspan versus slipway/hard ramp operations are not fully known to those with decision making powers. The is not a good track record of joined up thinking in Scotland – this needs addressing

Port Operation & Ownership No comment

Accessibility There are good and bad examples of access to Ports, Harbours and Vessels throughout Scotland. The “access” problem can be addressed over a period of time but needs careful consideration. Problems caused with the application of “big ship” construction rules on relatively small vessels of a similar type.

Funding At present all ferries are funded from one pot. Fares on ferries on Shetland are far less than Orkney, and the funding mechanism means ferries are rewarded on spend. Historical issue which makes Orkney uncompetitive today. Should be a pot of cash formulaically distributed. Need to relate internal to external routes. Subsidy. There are other ways of subsidising routes, as with the Air Discount Scheme in which the discount is applied on a per passenger basis. Financing must be addressed – with the possibility of using funding from the private sector

Methods of Delivery & Operation Tendering may be misleading/unrealistic (i.e. low bid wins contract, then demands for more money follow) for certain routes, more especially ‘thin’ routes in terms of volumes/revenues. However, such routes are served elsewhere by private operators based on subsidy and PSC’s. Gov should own ships, and tender the operation. But this does not really allow private ferry operators the opportunity to design/build ships, which may be a competence they have, and which government does not. A local operator is better because they would be committed to the route(s) and employ local crews. This depends on definition of ‘local’ operator (e.g. Stagecoach run buses on Orkney, with local drivers etc). Any contracted company, no matter where it is based, can employ local crew. The current deficit funded subsidy removes incentive to innovate. Whilst innovation is good, it can involve risk, which is not necessarily good for a lifeline service.

Private operators have driven important market changes (e.g. Orcargo, Pentland Ferries) including price reductions, and new ways of delivering services. Local crewing gives local economic benefits and commitment. Inter-isles services could be reconfigured based on hub/spokes principles, maximising local crewing. Crewing regulations can limit operations.

Financial Incentives Subsidy given directly to users would also benefit all operators, and reward the operators which the majority of users choose. But if subsidy is open to all operators, intense competition could lead to price war and bankruptcy. Controlled access is likely to lead to higher tariffs (e.g. exclusivity, like the Isle of Man Linkspan User Agreement), although price caps would limit increases. Current system limits the incentive to innovate (e.g. fixed ships, service specs etc). Targeted user subsidies may lead to subsidising islanders to go and shop elsewhere, which may damage the local economy. RET would also encourage those coming in to the islands. Targeted subsidies may infringe equity, by treating different user groups unequally. Tenders are selected not on basis of cost alone but also on other factors (e.g. experience, profitability etc.). Operators pointed out that NorthLink II won last tender yet the company in its previous form was not exactly profitable. Tendering routes is now the EU norm. But unlike Scotland, the EU norm appears to be that bidders bring their own vessels.

Competition & Procurement Breaking up a bundle can be opposed on grounds of cherry-picking. But CalMac argues all its routes are unprofitable. However, some individual routes may be profitable (e.g. Arran, Islay, Mull etc) if properly operated (i.e. by profit-seeking private operator). Length of contract may be important for private operator – is short 6yr contract more expensive for private operator (and hence for contract price)? For buses and trains, the leasing option overcomes short contract difficulty, and leasing of ships is today possible. But ships are not standardised, like most other transport vehicles. Although there are moves to better standardise ships. Who should fund inter-isles fleet? Operating and regulatory requirements means fleet urgently needs modernised. Private operators are not averse to the state providing/financing ships, if the state is able to do that. But private operators need input to ship specs as their 69

bid costs will reflect specific ship options/cost structures which may be different from other bidders. Smaller bundles could attract bidders. Large bundles are considered expensive for private operators to bid for. Small bundles could be tendered for at different times. Simultaneous tendering of small bundles/individual routes allows bidders to package as suits them. Issues of port suitability and associated costs to handle different vessels needs appraised.

Freight Competition has helped to reduce freight rates. But hauliers tend to capture much of the benefits of reduced rates. Subsidy influences mode of transport used, and may encourage use of less efficient modes (e.g. air/ADS, or high powered ship relative to more efficient ship). Distortions can disadvantage private operators (hence EC investigation). Train and road impacts and associated costs need better assessment; train could be used more but expensive/slow and depends on large subsidy. Separation of passengers and freight may lead to use of less efficient vessels and does not appear to fit industry trends. New routes need to be considered, e.g. Orkney-Inverness, or daily Kirkwall- Aberdeen service based on single ropax ship. Long routes may be less attractive to some passengers (though not all). Freight subsidies have general economic benefits, though weakness may be distortions if private operators are excluded (e.g. Pentland Ferries) or limited in some way or another (e.g. cap on LoLo operator results in a disincentive to grow its market). Freight should make more use of rail links to Caithness Competitive freight onto islands

Other Length and bundling of contract. It was felt that the current contract is too short and should be longer. There are a number of advantages in having a longer tender. The way the contracts are bundled is prohibiting other operators from bidding for the tenders. Orkney Ferries were previously to bid for the Scrabster – Stromness route but this was ‘frowned upon’ by the Scottish Government. Commuting. The price of ferry crossings and schedules often prohibit people commuting from the islands, particularly those employed on a part time basis. The cost of getting from the islands to work would barely be covered by wages. This isn’t helping to reduce the problem of population decline on the

islands. It was stated that commuting from islands is much more prevalent in Shetland as the timetables and cost make this a more viable option. Islanders allowance. Employees of the council, police and other public sector employees receive an annual allowance of £1800 to fund travel to work from the islands. Whilst this is welcome it was felt that this allowance is targeted at those who are on higher incomes to begin with and is of no help to those who struggle on lower earnings. Doesn’t help to create equity of access. Timetabling. Ferries stop much earlier in the evening here than in Shetland (i.e. 5.30pm as opposed to 11.30pm). This is seen essentially as a funding/policy issue. Public Transport. PT is seen to be poor on Orkney, expensive and not an option which is usually considered by residents. It was acknowledged that the cost of providing this is high, particularly to places which are remote. Capacity. Fares are not the problem on the Flotta ferry, it’s a capacity issue. Route would benefit from a bigger boat or more sailings. Shapinsay also suffers from capacity problems. Waiting environment at St Margarets Hope is unsuitable for passengers, particularly those who have to wait to catch a bus there in the evenings. There is concern on mainland Orkney of the focus shifting to the east of the island (i.e. the Pentland Ferry service from St Margarets Hope) at the expense of the west (i.e. the NorthLink service from Stromness). The Houton – Hoy service suffers from capacity constraints. A new bus has just been introduced which travels on the ferry and takes up quite a lot of space. The frequency of buses to St Margarets Hope has recently been improved to half hourly. It was questioned whether this level of service is really needed. There should be more flexibility for the NorthLink service from Lerwick to Aberdeen to service Orkney in bad weather. In the past Orkney has been bypassed when the ferry can’t get into Hatston, leaving passengers stranded and having to wait on the island. Why can’t the ferry call into Stromness on these occasions rather than bypassing Orkney completely? Other attendees praised the NorthLink service for the quality and frequency of the sailings. The service has come on considerably when compared to the level of provision 60 years ago. Public Drop-In Session. WP1 researchers interviewed one individual who wanted to discuss the inter-isles service to Egilsay, which forms part of the Rousay-Tingwall service, also connecting Wyre. There was dissatisfaction that OIC intended to replace the ageing ‘Eynhallow’ with the ageing ‘Shapinsay’. Replacing one 30-yr old ship with another 30-yr old ship was not considered helpful to the islands served. ‘Shapinsay’ is already the relief ship and is not well regarded by islanders. There are no shops, schools or other services on Egilsay so the ferry is key lifeline.

Current service is not regarded as responsive to user/islander needs. The service is driven by crew needs and preferences, it is believed. Off-peak sailings now need to be booked in advance or ferry will not go at all. There is a preference to maintain a public operator, provided it does the job properly. Last sailing is at 6.05 pm after which the islands are cut off. Later sailings would give islanders benefits. The Community Council has not worked very effectively in its attempts to improve service provision. The service basically needs a modern vessel and improved customer service. Concern was expressed by those present regarding the availability of ship repair and building facilities in Scotland. It is already difficult to get vessels maintained, refitted, repaired in Scotland – this situation should not be allowed to get worse. The overall Transport network to always remember – i.e.: internal isle air services, and the national network of air services. These form an important part of the transport network as a whole. Security; Inevitable that this will increase and will happen whether those present liked it or not – but it should be noted that, as in the comment regarding big ship rules, one size does not fit all. It is not possible, practical or sensible to apply a full set of security regulations in remote locations – and would it be needed? Repeat of the previous comment that one size does not always fit all situations Orkney Islands Council have established an internal group to look at ferry services in Orkney. The findings of this group will be fed into the Scottish Ferries review Council Sub-Group for the Steering Group. Should consider alternatives for empty sailings such as transfer of low number of passengers to flights. Consider repair facilities –small vessels have to travel beyond UK due to the lack of local repair yards. Hamnavoe is expensive to operate Scrabster – Stromness route should continue as it viable all year round

INVERARAY 25th March 2009

Routes, Services & Integration Who will take a strategic view of the routes, and integration – Ombudsman? What are the opportunities to improve timetables and ticketing Are we maximising the benefits of technology to enhance the customer experience

Are our harbours in the right place Would we get a better service from new locations which meet modern needs and vessels design Is there an opportunity for small, mobile pontoons to open up new routes, e.g. tourists Potential for new routes to have a positive impact on road traffic and connect new routes which otherwise could not. It was stated that the Largs/Cumbrae Slip route was not wanted/sensible. It was felt that nobody wanted to visit the Cumbrae Slip, but rather the service should use Milport, which is where people want to visit/get to. The current route was considered to be inconvenient for passengers, who have to use a feeder bus between Cumbrae Slip and Milport, which was very busy in the summer months. It was also suggested that more small scale services via pontoons would be possible, in particular to allow access into the National Park and small communities. It was also suggested that there should be wider links with the central Scotland and England, Wales, etc to allow freight and tourists to access the north of Scotland and the Islands without driving through the central belt. It was suggested that floating pontoons could be used to facilitate this. However, this brought up the issue of deciding what should and what should not be considered as a “lifeline” service. Integration was considered to be a good thing; however, it was unclear who could take on the extensive task of designing a truly integrated network. Where links exist operators should be working together to link with the ferry, however, it needs to be acknowledged that the bus/train also needs to make other connections along their route and that by fixing the problems of integration with the ferry service, this may create other problems along the route. The whole route/journey needs to be considered so as not to create other problems. When trying to integrate the services, it was considered important to take account of the knock on effects this would have to other operators, and not to consider only the large operators, but also the small ones. Some respondents highlighted that, due to the loss of public transport ownership from the public sector we now have very fragmented services. This means it will be very difficult to connect them again. It was considered that there were missed opportunities in the current system, and there could be better integration of resources. For example, it was suggested that the port at Wymes Bay could advertise the Isle of Bute.

Fares Could they be clearer Opportunity to be better integrated

What are fares for – cover costs, provide surplus for investment / shareholders? Better communicate the rational for fare structure which is consistent Is there an opportunity to maximise our ferry use and inter island / mainland travel through a fare structure? Can the ticketing be simpler like the bus companies i.e. single/ return / peak/ off peak It was highlighted that there was no structure in the current system, and that cost was an issue. Respondents felt the fare structure needs to be clearer. It was suggested that the core structure needs to be consistent, with “tweeking” for individual routes – but there was no agreement as to the extent of this “tweeking” in order to avoid the current unstructured situation. It was felt that, before setting fares, it needed to be decided what fares should be there to do, is it to pay for the service, to maximise the use of the service, or to control demand for the service? A clear rational for fares is required, and this rational needs to be consistent across the network. It was also stated that fares need to take account of the resident population, and not put people off moving to the island communities. The example of Jersey and Guernsey was cited, where ‘last minute offers’ are available. The example of the coach fares’ structure was also offered as an example, where a simple structure is in place, for example single journey tickets, day and open returns.

Vessels Are there viable alternatives to buying new Is there the potential for cheap and cheerful services – more frequent Will multi operators confuse ferry specification and design Would incentives drive ferry design with regards green issues What is the potential for multi route vessels Are there economies of scale to be had in procuring many ferries rather than one offs Better coordination of funding for ferries and harbour developments between councils / NDPs could save money What would the capacity of back up services be if there were many operators Could the operator tender be by vessel type or even by route Respondents wondered if it was necessary to build new vessels each time, or was there potential to purchase second hand vessels. It was also felt that more vessels were required in order to provide more frequent services. Some felt that vessels on shorter sailings may be “over spec’ed” in terms of the quality of the surroundings for passengers and the facilities available. One respondent referred to a study undertaken previously which indicated 74

that facilities were considered to be of lower priority to frequency, cost and onward connections for passengers. It was suggested that there could be tiered levels of facilities provided dependent upon the distance being travelled. It was also felt that cleanliness may be more important to passengers than the extent of the facilities offered. Some wondered, however, how the existence of multiple operators would affect the standardisation of ferry specification. As there are large economies of scale to be achieved when ordering larger volumes, it was considered sensible to design vessels to operate on more than one route. However, it was also stated that there should be a sufficient number of back-up vessels to cover breakdowns, and to supplement services during busier seasons. Again, the issue of multiple operators was raised, and how would vessels be shared between different operators. There was a suggestion here that when procuring services, routes could be “bundled” by vessel class

Ports & Harbours infrastructure Would common ownership help with the running of the services Better integration could have social and economic benefits Are they in the right place Would fewer ports allow for more focused investment Can the ports be run more efficiently Is the funding / spending review an appropriate way to fund capital projects Are we maximising the benefits from our harbours Would more deep water harbours attract new markets e.g. cruise liners It was suggested that there may be the opportunity to have fewer ports and reduce the infrastructure. However, it would be essential to consider the wider route before removing any seemingly unnecessary port. For example, there are 2 services to/from Arran so it may be suggested that one could be removed, however, trade uses both services to access Islay so they are not just serving Arran and Kintyre. It was felt there was a need to look at the current staffing structure as there is still a feeling that these are very inflexible and restrictive. Incentives should be available to encourage savings. Currently, savings achieved in one year results in a reduced budget being allocated the following year – therefore there is no incentive for cost reductions/savings. It was also suggested that there may be other uses that ports could be put to in order to maximise their use. For example, marina’s make money from more than just the boats. Further, it was suggested that perhaps more deep water harbours could be beneficial, as this would increase the opportunities for cruise ships, etc.

Port Operation & Ownership No Comment

Accessibility It was felt that more extensive testing of facilities should be undertaken before they are put into use. Also, there are opportunities to listen more to service users at the design and build stages of the projects which would reduce the risk of inappropriate designs. Quick turn around times at ports was also mentioned as having a negative affect on accessibility. These short time periods do not allow for mobility issues where embarking/disembarking takes longer. It was suggested that perhaps airport style busses could be used to board/alight from the vessel, or moving walkways to dictate the speed for walk on/off passengers. Good, clear signage is also required. As is information in order to allow people with mobility issues to plan for their journey. It was also suggested that there is the potential for local groups, charities, organisations, etc to help facilitate access to the vessels. It could be explored if this could be provided on a voluntary basis, or if subsidies would be required. All respondents agreed that there should be no cutting corners when it comes to safety. It was suggested that emergency buttons were installed in all ports, particularly where there are periods of time when the port is unstaffed. Finally, it was suggested that a Passenger Charter for Safety Standards is designed. Are there opportunities for people with restricted mobility (PRM) to feed into the design stages of both ferries and harbours If we are to increase the turn-a-round of ferries to increase the service we may need to look at how quickly PRMs can get on and off of ships, e.g. adopting moving walkways may mean that everyone moves at a desired speed, and allows quick turn a round Good communication through signage and announcements is viewed as important, and relatively cheap to fix STAR rating system was seen as a positive step, but would need to be accompanied in some cases with a cultural change

Cost & Affordability Is there a better way of funding the ferries which would improve efficiencies Would ring fencing money enable better long term capital planning As the benefits of the ferry services are both local and national, should funding therefore not come from a central point? Would a better service increase economic opportunities

Will the review have a detailed cost / benefit analysis of existing and potentially new routes? Can innovation drive down costs What is the best use of competition, sometimes this is not always the best solution

Funding It was felt that costs and funding should be linked to the nature of the service, i.e. it would be considered as a public service and, therefore, should be treated as one. The issue of public service funding was also discussed in relation to the potential for Local Authorities being allocated a “pot” of money to distribute between its services as it deems necessary. In order to avoid this situation, where there would be potential for the ferry funding to be spent elsewhere, it was agreed that the money allocated to the ferry services needs to be “ring- fenced”. Others suggested that the funding should probably be controlled centrally, in order to avoid local priorities reducing ferry budgets. It was also felt that the delivery of the services should be more open to the “open market”. However, it was also felt that the ports and vessels should remain in public ownership. The delivery of the service could also provide increased opportunities for revenue generation. Some respondents stated that detailed cost analysis is needed for each area regarding the funding for each route (for both existing and potential routes), and without this they could not comment on potential for the future. Competition, or the potential for a route to be commercially viable, should be considered when designing routes and allocating funding.

Methods of Delivery & Operation Future services need to be more customer focused than today. Services should be run like a business: Responsive (using weather windows), reliable and flexible in delivery (e.g. better scheduling on short distance ferries). No preferences towards public or private operation were expressed. The most relevant issue was that services meet set requirements (reference to need for clear tender specifications that reflect needs of communities and business) High interest was expressed in how far services could be tendered even for “small services” and, if there was a possibility for operators to introduce more modern ships in such tenders. The expectation was expressed that private operation might represent a good opportunity to bring in new innovative ways of operation, which allows for an improved level of service quality

Financial Incentives The idea was welcomed to give operators a fixed level of subsidy, which is based on the cost to provide a defined acceptable level of service. Subsidy paid on certain routes under the current framework is seen as being too high. Potential savings could be exploited through the use of more modern and more adequate craft on certain routes. The question was raised: “What are the incentives for current public operators to reduce the level of necessary subsidy?

Competition & Procurement Debundling seen as important to users (bundling by economic area) Key: Setting clear requirements in tender specification: Source of ships up to operator Interoperability of ships (only fully possible with standardisation of ports) Timing of tendering process needs to be precise and give opportunities to operators to develop their own ships or ship solution. Environmental standards are important (e.g. emissions) Full specs of information available Develop further ways to make tenders attractive to bidders Possibilities to put in place yield management pricing system Price cap needs to be set In order to secure competition it seems necessary to standardise ports and port equipment for selected bundles/routes. Security of service delivery should be maintained via contract and subsidy (6 years). What is the difference in contract between a bus and a ferry contract to rural communities?

Freight No Comment

Other Safety No cutting corners to reduce costs Possibility of having emergency buttons at remote locations What is the cost of safety in design – fewer staff Possibility of passenger charters and standards for safety Environmental issues The consideration of environmental issues in tender requirements and the application of high standards were seen as very important.

If ships are replaced, their replacement should be fitted with modern technology that will be able to deliver towards the goals expressed in the climate change bill and should comply with high standards such as in the Baltic (SO2 emissions etc.) General issues The following question was raised: How can a standardisation of ports be put into reality, if there is no port and maritime policy? The participants expressed the wish for a transport regulator that oversees all transport modes, because transport matters should be addressed as an integrated matter. The participants felt that it is of utmost importance that the ferries review and its results are backed up by a strong political will to allow for change from the current approach which is not considered acceptable.

ISLAY 31st MARCH 2009

Routes, Services & Integration The shortest route is the best route to go (Port Askaig – Mainland) Frequency of service is very important Investigate a new route between Port Askaig and Oban via Colonsay to operate 4 times a week all year round. There are actually fewer sailings now than there were twenty years ago with Western Ferries Integration of ferry and bus services essential The changes recently made to the timetables are a very positive step forward Routes should not be broken up into separate bundles Ferry integration very poor with local buses on Islay. More bus routes serving the area, and Ports, required Ferry review should include Campbeltown - Ballycastle route Shorter / more direct routes should be considered – e.g. Mallaig Lochboisdale Route – should consider a Kennacraig/ Port Ellen/Craighouse service at least a few days a week. Service to Claonaig should be kept – very useful for journeys to Ayrshire Keep Kilchoan Wants 2 ferries on Islay route as ongoing commitment Suggests there should be an afternoon link to Colonsay from Port Askaig using the ferry which sits in Port Ellen from 12 to 6(could be working time issues on this) Does not want a connection to Oban other than current 79

Concerned at lack of integration between bus and ferry for afternoon sailing into Islay, and issue of any late ferry to mainland not meeting the bus, Kennacraig being so isolated. Would like Ferry Operator to take responsibility for onward transport when ferry is late, which they understand is done on occasions on NorthLink Happy with frequency as at present Doesn’t want a link to Oban for ferry Happy with existing 2 port arrangement on Islay Has no problem booking on the 2 ferry service Sees value in the overland route but appreciates the environmental and community impacts it would cause. Feeling that enough to "do minimum" at Kennacraig to allow future to consider a shorter route. Two vessels all year around and two island ports to remain forever and piers suitable for other boats to use. Twice a day service and more in the summer Running N-S might be an affordable option. Would not advise it. Could all in at islands up and down. Oban link? PA - 0. Oban has better facilities. Better than Kennacraig benefits to Oban - rail. Could take freight off A83. Passenger service from Craighouse. 12 seater. Working very well. Operating at 50% (1st year, no advertising). Wants concessionary tickets to be available for pensioners - travel card. All tides service at PA. Not overland route with short ferry crossing. 27m single track road. Craighouse do not want traffic past doors. It would involve road improvements then may be, but not as is. Shorter route - Join to Colonsay more often Tourists would use route from Oban, Colonsay and Islay more often. Islanders would prefer to go to Oban - services, no need to take car, B&B, night out. Happy with current routes. Does not think overland route would be any quicker. Poor roads are an issue and would be expensive. Thinks improving roads would destroy the characteristics of Jura and Kintyre. Cannot have services maxed out. Must have some slack. Buses meeting every sailing would improve.

Fares The cost of passenger fares is acceptable although there should be a discount for Island residents

Fares should not be so low as to allow day trippers. Visitors should be encouraged to stay overnight Fares have to be fair and consistent and cheap Fares – too high for islanders, including their discount Fares – should offer discounts for early purchase of tickets Fares – special deals to encourage use at quiet sailing times Fares – special deals to tie in with local hotels or shopping/sales activities should be promoted Values the Concessionary fares scheme in place on the Islay service for residents, and the air ADS support. Passenger service from Craighouse. 12 seater. Working very well. Operating at 50% (1st year, no advertising). Wants concessionary tickets to be available for pensioners - travel card.

Vessels The new ship should have been bigger Ferries – new designs welcomed, but Catamarans not suitable due to sea conditions Thinks the ferries could be lighter and faster if less freight carried Crazy to keep vessels in the system. Need to let private operators bring their own vessels Two vessels all year around and two island ports to remain forever and piers suitable for other boats to use. Ferry currently there needs replaced. Makes economic sense because of whisky freight. Needs another new boat, same size as new vessel.

Ports & Harbours infrastructure Location of Mainland Port needs to be looked at. Ideally new port should be constructed further down the Loch Port Ellen should concentrate on the leisure side. There are 3 good beaches there and the marina should be developed. Standard piers required. Look at loading of coaches and trucks. Move from Kennacraig, further down the loch Total rebuild of Kennacraig versus a new port. Why more expensive? Strongly looking for a different port further down the loch. Was a previous study. Two vessels all year around and two island ports to remain forever (Robin and Ann-Marie) and piers suitable for other boats to use.

Development of Port Ellen needs to take account of views of local residents for noise and disruption of building plus ferry and cargo traffic. Private housing. Does Islay really need two ports? PA better record for sailings. Security issues at ports - future proofing for needs into future. Need 2 ports in case one not useable.

Port Operation & Ownership Structure – central ownership for all vessels and ports connected with lifeline ferries. Franchise terminal for island communities. Take ferry responsibility and ports responsibility away from LA. Should be CalMac. Better to have it all managed by a big company i.e. part of central contract. Council do not have expertise. Same people should run ports as run (own) vessels - should all be nationalised, should be a single system, all life line services should be govt - including ports at either end.

Accessibility Accessibility on CalMac ships is good and staff are very helpful Access arrangements/assistance for disabled currently very good - operator provides good help when requested.

Cost & Affordability Would welcome RET for the Islay services Concerned at the penalties being applied by Flybe for cancellation of flights, and would not wish this type of system applied to the ferries (loss of money even if cancelled in reasonable time with good reason) Sea transport more cost efficient than road transport.

Funding Centralisation of the funding of all ferry services is very important to allow a consistent approach Level of subsidy for ferry services should be such that Islanders are not significantly disadvantaged when compared to Mainlanders Funding – ferry review should ensure the examples from other countries are fully examined Need funding programmes of more than 3 years. Communities accessing EU £ for e.g. terminal buildings Jura-Islay service - can it be part of centrally funded service? LA cannot cope with funding infrastructure. Ferry links to Jura underfunded.

Methods of Delivery & Operation Argyll and Bute Council should not run any ferry services Customer care and crews on CalMac vessels are excellent Ferries should operate exclusively from Port Askaig with an additional linkspan built there Luggage is difficult to lug on and off. Why not a trolley you could load your luggage onto and then collect the other end. It is important to be able to have a meal onboard but there is no need for separate bars There should be different kinds of accommodation onboard ferries including quiet areas and play zones for children Luggage for foot passengers - should have option to have it carried onto ferry by operator Support the retention of catering on the ferry. People wouldn’t buy meals on the island in stead, they would take sandwiches Need a quiet working area on the ferry for use of laptops and internet. Crewing and more economical service e.g. no café needs to be considered. Would encourage people to eat on island. Consider not on board crew quarters.

Financial Incentives Level of subsidy for ferry services should be such that Islanders are not significantly disadvantaged when compared to Mainlanders Costs – far more openness in relation to costs and subsidies for each route and service should be available to all. Concerned at the penalties being applied by Flybe for cancellation of flights, and would not wish this type of system applied to the ferries (loss of money even if cancelled in reasonable time with good reason)

Competition & Procurement They want a single bundle tender to avoid cherry picking CalMac as a single bundle - because of relief vessel, crewing, experience etc. Need 2 boats plus 2 ports - spare vessel in fleet. Need 2 ports in case one not useable.

Freight The cost of transporting freight should receive a higher subsidy Livestock deserve special considerations. Holding pens should be made available in case there are any delays to the sailings Livestock are better transported from partly open decks

Would like a new terminal in West Loch to reduce journey time for livestock. Beasts from Islay are taken east to fatten up before sale, abattoir on Islay does not provide best option for most Supportive of the Jura overland route Considers there may be a case for a freight service from Port Ellen direct to the Clyde. Shorter journeys for cattle. Aberdeen, D&G, England. Whisky- Islay - Central Belt. Could be Oban or Kennacraig, could be Mull of Kintyre. would support a more close port on mainland

Other Publicity for the consultation event was ‘dire’ which resulted in reduced attendance If the Ferry review gets it right it should lead to an increase in population on the islands A presentation/pre-consultation was anticipated at this session – not prepared to make meaningful comment at this time Why was Carl Reevy not invited to the morning session? (Carl Reevy is editor of the local newspaper, the Ileach) Not clear on reason or intent behind a recent delegation from the ‘Scottish Government’ who were on Islay seeking views on CFL, route bundles (3No) and talking to distilleries – who was it and what was the intention? Ferry review should ensure ‘hands on’ experience & advice is sought in addition to academic views/experience. Environment – measures to reduce CO2 emissions from vessels very important. Review group to visit Jura. Steer Davis Gleave, report mentioned Islay-Ballycastle friends and shopping. People go on fishing boats. Need deliberators. NCA - risk, not proven British Res Council. If risk not > 1 in 2 years, not cost effective. Continually monitoring. Do on NorthLink. Immediate issue is quality of care after medical rooms need to be more passenger friendly - couch, defib, disabled loo, telephone. Islay only has psychiatric patients under detention. Could also be used by people who stay in ambulance. Daylight hours are a fine option - do not want to encourage driving in dark. Not 24/7 but 7 days a week - pretty standard each day.

TIREE – 1ST APRIL 2009

Routes, Services & Integration A belief that ferry services to Tiree have not improved in forty years, and also, "we do not require a Sunday service during the summer". (Mary MacKinnon). The winter timetable is unacceptable and 'the bottom line' would be a daily service A belief that CalMac services are run for the benefit of CalMac employees. Are our ferry services adequate to cope with the future ' Tiree Array', a Scottish Power offshore wind farm of 100+ turbines in 2015-2020. Summer timetable –need a Saturday sailing, not a Sunday sailing Would be helpful to increase frequency of link to Barra Alternate first landings between Coll and Tiree – would allow more day trips on Tiree Need a daily service with a 24 hour turnaround Issues with unreliability

Fares The block booking issue is a myth and is used as an excuse by CalMac to cover inadequate capacity at busy periods.

Vessels What is the Scottish Government timetable and procurement process for replacing the ageing fleet, (principally LOTI). Why can't new vessels be put on order now as yards are slack. Why can't new vessels simply be chartered. Why is there such a wide divergence between the standards of vessels provided by CalMac and those provided by NorthLink? Why can't the NLF procurement process be adopted by SG/CalMac? The Lord of the Isles (LOTI) was too small.

Ports & Harbours infrastructure Safe access for the vessel in Tiree –the linkspan is exposed and the current vessel is unable to use stabilisers when docking

Port Operation & Ownership NO Comments

Accessibility Difficulty in accessing vessels – It is impossible for a passenger to carry a child, (for example), up a ramp with luggage also in their hand without a friend’s assistance, so why is there not some form of luggage management/forwarding

It is impossible for a passenger to carry a child, (for example), up a ramp with luggage also in their hand without a friend’s assistance, so why is there not some form of luggage management/forwarding.

Cost & Affordability No comments

Funding No Comments

Methods of Delivery & Operation CalMac staff are discourteous, do not respond to complaints and/or correspondence, and show no respect for important customers. It is almost impossible to get a booking on the LOTI during the busy summer timetable period and this is going to get worse as RET. becomes more popular with tourists. Recent large projects on the island had resulted in the ferry being fully booked

Financial Incentives No Comments

Competition & Procurement No Comments

Freight RET –hauliers not passing on savings –although one haulier did comment that she had passed on some savings to larger customers

Other No Comments

THURSO – 19th MAY 2009

Routes, Services & Integration Routes between Orkney and the Mainland were discussed and a paper was tabled with information and details. This paper was passed to MVA Consultants Ltd and TRi The Scrabster to Stromness route should be continued.

Fares No Comments

Vessels No Comments

Ports & Harbours infrastructure No Comments

Port Operation & Ownership No Comments

Accessibility No Comments

Cost & Affordability No Comments

Funding No Comments

Methods of Delivery & Operation No Comments

Financial Incentives No Comments

Competition & Procurement No Comments

Freight No Comments

Other Comment was made that Highland Council were not aware of the resident’s survey. Scottish Government agreed to send the necessary link to the business survey which had just started to enable them to have access to it and to make others aware of the survey. It was queried where the Ferries Division and the Ferries Review fitted into the Scottish Government. It was explained that Ferries division was under DG Economy – Transport. The Findings of the review would feed into the next comprehensive spending review making a business case for future investment In vessels and harbour infrastructure.

MALLAIG – 11th JUNE 2009

Routes, Services & Integration Sought assurances on the continuation of the Mallaig/Armadale ferry service. Dialogue was required on service levels with later services required and an improved Saturday service. Services should be tailored to local needs. In response it was stated that there was no need to wait for the ferries review but to approach the Regional Transport Partnership with suggestions for consideration. 87

The ferry to Skye must start earlier. Knoydart residents want a similar service to the service provided to the small isles. The improved road from Mallaig to Fort William should be taken advantage of with Fort William used as a hub for the area. It was stated that the Mallaig/Lochboisdale route should not be considered in isolation but a wider review of all the services in the area was required. Community Planning Partnerships should be part of the consultation process. Ferries should be looked at as part of the wider transport network. The ferries review was the opportunity to campaign for better ferries and improved integration. The review should be about a more user friendly ferry service taking into account environmental issues. A number of ferry services do not operate early enough or late enough which prevents commuting. Operating times should be lengthened. Timetabling is also very important. Some of the ferries to the small isles did not carry many vehicles. Marie Mackinnon Small Isles CC (Eigg) said that the ferry service to the small isles did carry a high number of vehicles. Pleasing to see the review taking place and it was very important that integration was looked at closely. Integration was also an issue citing the case of the time of ferry arrivals and bus departures to Glasgow. Small isles service should be supplemented with a small passenger ferry to allow daily sailings to all the small isles. Lack of affordable services to the Ardnamurchan peninsula –currently served by a private commercial operator and a small passenger ferry supported by Highland Council.

Fares Asked if a special day return from Mallaig/Armadale could be introduced.

Vessels Letters re ferry issues from locals were produced. We needed to learn from other countries and use smaller, faster vessels. Mallaig/Lochboisdale route should be considered. The review was also an opportunity to look at available ships and crewing options. Issue of replacement ships when the regular ship was being refitted.

Ports & Harbours infrastructure Where has the £.5 million pa went that CalMac paid to highland Council to berth at Uig. It was felt that there had been no recent investment in Uig. CMAL commented that the £.5 million would go on routine maintenance. Highland Council pointed out that the Council had spent £1.8 million pounds in Uig 8 years ago. There were also other problems in the area and the 88

situation was being monitored. The issue of a new breakwater had been raised but the cost of this would be £40/£50 million. Looking at cancellations showed that in recent years between 3-6 sailings per year had been lost. It was hoped to improve the terminal facilities with the assistance of CalMac in the future.

Port Operation & Ownership No Comments

Accessibility Highlighted the difficulties foot passengers encountered on some routes.

Cost & Affordability No Comments

Funding Ring fenced funds would be required What plans, if any, were in place to assist enterprises like the Isle of Skye CIC as capital investment was a problem? This was a good point as some ferry services were funded through the SG, some through LA’s, some were privately operated and some by communities. There did not seem to be any planning and they appeared to have evolved by accident. Isle of Skye CIC pointed out the cost of using the community ferry was relatively cheap and that they managed to put £2.5K back into the community

Methods of Delivery & Operation Opposition to the break up of CalMac. Most of the workforce lived locally and this would affect all the community.

Financial Incentives No Comments

Competition & Procurement No Comments

Freight Fare structure for freight to the small isles was raised. This was very expensive and should be reduced. The small isles have a fragile population and this should be taken into account.

Other No consultation with existing crew, present crew have experience and skills which may disappear if private operators took over. Jobs would also disappear if private operators took over.

Welcomed the review, it was a good initiative. How do we get there, investment, continuity of Government policy and ring fenced funds would be required. A good ferry service would help to maintain population levels on the Islands. Queried whether the questionnaire adequately represented views of the islanders as only one was issued per household. The responses would be limited by time and numbers. Small group meetings on the islands should be carried out and more consultation was required.

KNOYDART – 6TH OCTOBER 2009

Routes, Services & Integration Knoydart residents want a similar service to the service provided to the small isles The frequency of the service was discussed. There were mixed views as some indicated that the existing service, daily Monday to Friday in Summer and Monday, Wednesday and Friday in Winter, was sufficient. Others would prefer a daily service all year with a roro service say weekly/fortnightly. However it was felt generally that the timetable was set with visitors in mind. There should be a facility to allow residents to leave earlier and come back later than the existing timetable allowed, say once or twice per month. It was also mentioned that a number of residents were cautious about the introduction of a roro service and more frequent ferries as they currently had a relaxed, more traditional way of life, and that while increased tourism brought benefits, consideration should be given on how to limit tourism to preserve and retain the residents’ current lifestyle. Integration with the rail service to and from Mallaig was discussed. It was highlighted that in Summer the train, if on time, arrived at 14.09 and the ferry to Inverie left at 14.15. The matter had been discussed with Scotrail but the train times had been set as a result of the timings of the Lochboisdale ferry. Another train arrived at 18.00 and if the ferry service could depart at a suitable time afterwards this would be an improvement. It was also felt that a service to Skye should be considered

Fares Fares were discussed. There was a day return fare for residents of £6 but a one way journey (returning another day) was £5. Fares for tourists were considerably higher.

Vessels No Comments

Ports & Harbours infrastructure CalMac complimented the forward thinking on the part of the Knoydart Foundation and the Council on the construction of the new pier which had been designed to accommodate a number of different type of ships. However, it was highlighted that access was difficult for people with restricted mobility. 90

Port Operation & Ownership No Comments

Accessibility CalMac complimented the forward thinking on the part of the Knoydart Foundation and the Council on the construction of the new pier which had been designed to accommodate a number of different type of ships. However, it was highlighted that access was difficult for people with restricted mobility.

Cost & Affordability No Comments

Funding No Comments

Methods of Delivery & Operation No Comments

Financial Incentives No Comments

Competition & Procurement No Comments

Freight The cost of transporting freight raised a number of comments. While it was felt that to make arrangements to get freight to the area was not difficult the cost of transportation was high as there was no subsidy to commercial operators. The example was given that to transport a car to Mallaig on the service provided by Milligan Transport on the Spanish John would cost £117 one way. The cost depended not only on weight but also on the volume carried. The passenger and freight service provided by Bruce Watt over the years was valued but there were also a number of small commercial operators who transported freight and their contribution should not be forgotten.

Other Discussing the questionnaire, if those attending felt that some of the questions did not apply, in response they should write what they thought was appropriate. The final destination of any journey was important information to be collected. While Mallaig may have been the final destination it could also be a stopping off point for a final destination in Glasgow, Fort William or Inverness. As part of the Review it was important to gauge the demand for any service. It was noted that there was very occasional capacity constraints on the route but Bruce Watt was usually prepared to put on an additional sailing to cope. Knoydart Foundation said that in the original Business Plan, there was a target to increase the population to 100 (at the time it was in the sixties) and the current population, excluding those on the Loch Hourn side, was 116 (info

provided by Angela post meeting). One of the main aspirations of the Knoydart Foundation when it was established in 1997 (the community buyout came to fruition in 1999) was for the area to become more economically viable with more and better paid jobs. A number of people had more than one job and a number were self employed. Of the jobs held by the residents most were reliant on the holiday accommodation facilities required by visitors Those attending were asked to complete the questionnaires and to leave them for collection. Some questionnaires and copies of Scottish Governments presentation to be left and she would arrange for the presentation to be distributed and for other residents to complete the questionnaires and she would forward them Scottish Government.

WYRE – 24th NOVEMBER 2009

Routes, Services & Integration The ferry stops for lunch at Rousay – why not Egilsay? Wednesday service has been reduced – not clear why, and want to know. Islanders have to book for certain services, and feel this is unfair. Issues with integration between ferries, buses, trains. Buses at Aberdeen don’t link well with NorthLink. Issue with buses not waiting for ferry at Tingwall. Generally happy with service Like the Stromness-Scrabster service Rousay get much better service. Need Sunday service. Difficult to make visits to doctor, though emergency service is available. Service is miles better than 25 years ago. Frequency and reliability of service is good. Punctuality OK.

Fares Why is there a charge for bicycles on the ferry Would like cheaper fares and earlier sailings.

Vessels Issue with cabins on Aberdeen Kirkwall Issue with capacity – can’t get booked on vessel sometimes in summer.

Ports & Harbours infrastructure It would be more sensible to have the pier at the other end of the island – more accessible and would save fuel. Slip is not well maintained and can be slippery.

Port Operation & Ownership No Comments

Accessibility No Comments

Cost & Affordability No Comments

Funding No Comments

Methods of Delivery & Operation Flexibility depends on goodwill of crew. (On the day the crew made a special one off journey to return the Egilsay islanders to prevent a long wait). Issue with capacity – can’t get booked on vessel sometimes in summer.

Financial Incentives No Comments

Competition & Procurement No Comments

Freight Freight charges are very high. Major issue for development of community – can add 25% to the cost of building a house.

Other Islanders pointed out that we missed a nearby island in holding this event – Gairsay. There is one family there, who have been there a very long time. Egilsay islanders said they would obtain views from that family and pass them to Scottish Government. Similar issues to Graemsay islanders in terms of perceived attitude of OIC / OF – they feel they are not cared about or listened to.

GRAEMSAY – 25th NOVEMBER 2009

Routes, Services & Integration Service OK at the moment, but there are concerns that it might deteriorate [this seems to be symptomatic of a lack of trust between islanders and Orkney Ferries/ Council, which surfaced repeatedly during the event] First ferry doesn’t leave early enough to allow islanders to work in Kirkwall, though they can work in Stromness. There are some services that islanders have to phone for – they do not agree that this is justifiable.

Problems with onward bus link – bus does not always wait for ferry. Kirkwall Academy kids are often late for school. They often use the Stromness-Scrabster service. Problem with onward bus service, which is sometimes full or doesn’t wait for ferry. Sometimes use Aberdeen service to go to hospital appointments. Happy with service. The service is well-used. There are people on it every day. Islanders are happy with the reliability of the service. Islanders commented that the winter service is more than is needed. They have wondered whether this is being done to demonstrate lack of use prior to withdrawal, so are worried. Again, seems to be lack of trust/ communication between OIC / OF and islanders. Would appreciate a late sailing on a Friday to allow islanders to attend social events and evening school meetings. Early time of last sailing means it is also impossible for islanders to attend consultation meetings arranged by council. Need earlier meetings or later sailings!

Fares Fares are quite high. If they buy book of 50 tickets, it is 50% cheaper. Can be a lot of money to lay out at once for some people.

Vessels Problems moving livestock and machinery etc due to lo-lo nature of service. Islanders believe a ramp is the best solution (though current vessel the “Graemsay” cannot use a ramp.). Actions are taken by OIC / OF without consultation. Examples include work done on lengthening the pier and lengthening the vessel, when islanders had been pressing for a service that uses a ramp. Current vessel has a crane installed on it. The nature of the present service is not DDA compliant and causes major accessibility problems for anyone who has even a minor mobility problem. The local farmer feels that freight charges are too high and don’t make sense – and the lo-lo nature of the service is a huge problem for him, particularly with livestock. Difficulties moving heavy vehicles, and safety issues with crane arrangement on present service.

Ports & Harbours infrastructure Islanders believe a ramp is the best solution (though current vessel the “Graemsay” cannot use a ramp.). Actions are taken by OIC / OF without consultation. Examples include work done on lengthening the pier and lengthening the vessel, when islanders had been pressing for a service that uses a ramp. Current vessel has a crane 94

installed on it. The nature of the present service is not DDA compliant and causes major accessibility problems for anyone who has even a minor mobility problem.

Port Operation & Ownership No Comments

Accessibility Actions are taken by OIC / OF without consultation. Examples include work done on lengthening the pier and lengthening the vessel, when islanders had been pressing for a service that uses a ramp. Current vessel has a crane installed on it. The nature of the present service is not DDA compliant and causes major accessibility problems for anyone who has even a minor mobility problem.

Cost & Affordability No Comments

Funding No Comments

Methods of Delivery & Operation No Comments

Financial Incentives No Comments

Competition & Procurement No Comments

Freight Problems moving livestock and machinery etc due to lo-lo nature of service. Difficulties moving heavy vehicles, and safety issues with crane arrangement on present service.

Other Ferry is used for commuting, shopping, children attending school, going to medical appointments. Local farmer uses it to move livestock and machinery. The local farmer feels that freight charges are too high and don’t make sense – and the lo-lo nature of the service is a huge problem for him, particularly with livestock. Perceived lack of engagement with islanders from OIC / OF.

Appendix 8: Data Collection Main Objective The Ferries Review has been tasked with looking at how individual communities use and depend on their ferry services. Many of these island and peninsula communities that rely on ferries services are very different, so for a data collection exercise to effectively support and inform the review, it is essential that robust analysis is carried out at the level of the individual community. Household Data Collection Exercise In the first instance the reader should not be concerned if they were not contacted as part of the data collection exercise for households. This is because the exercise relied on sampling, where we randomly select a number of households to compile a representative sample of the whole population of that particular community. If you were contacted then it would be through either telephone calling or postal questionnaire (the questions in both were identical). Our preferred option was telephone calling, as this allows the interviewer an opportunity to clarify and interact with the household member. For communities with more than 1,000 households the default method of contact was by telephone. There were a few examples of areas where the telephone exercise was less than successful. In this situation we used the postal questionnaire to boost our response rate. For smaller communities of less than 1,000 households, the default method was postal questionnaire supplemented with telephone interviews where appropriate. Table A1 then summarises the sampling for the household data collection exercise. The figures on the right hand side of the table show the number of households that were contacted to take part in the exercise, either through telephone interview or postal questionnaire. In total 4,268 households, around 8 per cent of the total household population of the target areas, participated in the exercise. Set against an initial target of 4,350 households, this represents a significant achievement and a vindication of the strong interest local communities have in their ferry services. Naturally there was more sampling in the comparative population centres (the reader should note that we need proportionately less people to achieve a statistical sample in a larger population centre compared to smaller communities) but the exercise was also very successful in achieving target quotas for almost all communities. Table A1 ACTUAL SAMPLING FOR THE FERRIES REVIEW

Category 1 - Areas served by national ferry network 1a. Large Population Centres Shetland mainland 282 Orkney mainland 281 WI - Lewis 254 WI - Harris 152 WI - Barra 153 WI - North Uist & Benbecula 214

WI - South Uist 196 Mull 213 Tiree 88 Islay 204 Bute 250 Arran 241 Great Cumbrae 276 Sub-Total 2804

1b. Small Population Centres Small Isles: Raasay 32 Eigg 15 Muck 9 Rhum (& Canna) 5 Coll 38 Iona 35 Lismore 33 Gigha 28 Colonsay 4 Kerrera 5 Sub-Total 204

Category 2 - Areas served by regional/local ferries Shetland isles 182 Orkney isles 233 Jura 16 Luing 44 Easdale 7 Sub-Total 482

Category 3 - Peninsula Communities Ardnamurchan/Morvern 241 Cowal Peninsula & Dunoon 259 Kintyre Peninsula 252 Rosneath 26 Sub-Total 778

TOTAL 4268

Other Data Collection Exercises As well as the main data collection exercise, of households and actual communities served by the ferry service, there were two additional data collections that ran concurrently. Both reflected the importance the Ferries Review attributed to businesses with an interest in the local economy and the substantial numbers of visitors to these areas that use the ferry service. We did not approach businesses direct or use any sampling methodology. As a first tranche to understand the views and thoughts of business we deemed it satisfactory to set up a web-based questionnaire and invite participation from businesses. This fairly light-touch approach worked well with a sufficient response rate to enable the review to draw conclusions across the more populous areas of the network. 97

The third data collection exercise was a comprehensive on-board survey across twenty-four routes during the summer season. A total of 3,600 questionnaires were distributed on the sailings, and 1,354 were returned; table A2 shows the distribution of completed questionnaire by area. This comparatively higher response rate (37 percent) is a feature of on-board surveys. Primarily aimed at understanding the experiences of visitors (including tourists) to the islands and peninsulas, we also used the opportunity to conduct a ‘stated preference’ exercise. This is a survey technique where we ask recipients to choose between various hypothetical, but nevertheless realistic scenarios. This enables a better understanding of what attributes of the particular ferry service (fare rate, travel time, frequency of service, etc.) are most or least valuable to them. We can then build up an aggregate picture, which can then be used to design suitable changes to the service in the future.

Table A2 Description Route-Specific Shetland Isles to the mainland Aberdeen to Lerwick 78

Shetland Isles (internal) Lerwick to Bressay 67 Toft to Yell

Orkney Isles to the mainland Aberdeen to Kirkwall 99 Stromness to Scrabster

Orkney Isles (internal) Kirkwall to Westray Kirkwall to Shapinsay 59 Kirkwall to Sanday Houton to Hoy

Oban to Western Isles to the mainland Castlebay/Lochboisdale Uig to Lochmaddy 370 Berneray to Leverburgh Trabert to Uig Ullapool to Stornoway

Western Isles (internal) Barra to Eriskay 128

Inner Hebrides to the mainland Oban to Craignure Oban to Colonsay 248 Oban to Coll Oban to Tiree Mallaig to Armadale

Inner Hebrides (internal) -

Firth of Clyde Adrossan to Brodick 234 Wemsys Bay to Rothesay 98

Gourock to Dunoon

Mainland to mainland Ardgour to Nether Lochaber 71 (Corran Ferry)

TOTAL 1354 Note – Inner Hebrides (internal) wasn’t included because of very low passenger numbers

Appendix 9: The Historical context

Central Government support for ferry services

Although there have undoubtedly been maritime transport connections between the Scottish mainland and its many islands for as long as the islands have been populated, the history of Caledonian MacBrayne goes back to 1851, and Government interest in ferry services in Scotland goes back many decades, the first major milestone in the development of systematic Government support for ferry services was the Highlands and Islands Shipping Services Act 1960. That Act provided the first comprehensive legal framework for subsidy arrangements and enabled the then Secretary of State for Scotland to seek Parliamentary approval for “undertakings” to support maritime transport services in the Highlands and Islands. The first such “undertaking” was made in 1961, with further approvals up to 1995, enabling the Secretary of State for Scotland (and the Scottish Ministers, after Devolution in 1999) to fund what became Caledonian MacBrayne Ltd to provide Clyde and Hebrides ferry services. Those ferry services subsequently formed the basis of service requirements under the 2007-2013 public service contract for Clyde and Hebrides ferry services. The 1960 Act also provided the legal basis for Government support for maritime transport services to Orkney and Shetland. P&O had operated passenger services to the Northern Isles from 1971 to 2002, trading as P&O Scottish Ferries from 1988. For most of that period, P&O Scottish Ferries was a monopoly operator, transporting passengers, cars, freight and livestock. However, by 1984 it was struggling to remain profitable and was brought into the then Scottish Office’s Tariff Rebate Subsidy (TRS) scheme. That scheme, established under the 1960 Act, had previously been used to provide support for bulk freight and livestock carryings by various small shipping operators. TRS payments were made to eligible shipping operators designated by individual “undertakings” approved by Parliament provided a subsidy for every unit of eligible traffic carried and were intended to enable operators to reduce their charges to customers whilst still allowing a reasonable level of profit. TRS payments to these small freight operators ended in 2004 following a Scottish Executive review of its effectiveness that found that it was failing to provide significant benefits to end users. Tendering of ferry services TRS was paid to P&O Scottish Ferries up to 1997, when it was decided that ferry services to the Northern Isles should be tendered for the first time. P&O Scottish Ferries won that first contract (to 2002), which covered passengers and accompanied cars only, and the company continued to receive TRS in respect of livestock carryings, given the specialist and largely seasonal nature of that traffic. By the time that the 1997-2002 contract had to be retendered, new safety standards applicable to roll-on roll-off vessels triggered the need for new vessels (and associated harbour developments) and a step change in the quality of ferry services to the Northern Isles. By 2003, over £150 million had 100

been spent on new vessels and harbour developments to establish the hardware that still serves the Northern Isles. NorthLink Orkney and Shetland Ferries Ltd (a joint venture between Caledonian MacBrayne Ltd and the Royal Bank of Scotland) duly won a 5-year public service contract intended to run until 2007. However, that contract failed in 2003, due to a combination of largely external factors that were fully documented in an Audit Scotland report1 in December 2005. As that report recognised, “lifeline ferry services are fundamental to the people of the Northern Isles. The ferries supply them with basic living commodities, provide transport links to the mainland and support their economic well-being.” Accordingly, the then Scottish Executive felt it had to maintain those essential services by making additional extra- contractual funding payments whilst re-tendering the contract. The subsequent 2006-2012 Northern Isles ferry contract was won by NorthLink Ferries Ltd2, then a subsidiary of Caledonian MacBrayne Ltd. i.e. a different company from the previous operator. The 2002-2006 Northern Isles ferry contract provided by NorthLink Orkney and Shetland Ferries Ltd had provided subsidy for passengers and accompanied cars, with TRS in respect of livestock carryings, but freight and other carryings were provided on a commercial basis. The 2006-2012 contract was fundamentally different in that subsidy was available for all carryings, including freight, commercial vehicles and livestock, replacing the former fragmentation of funding involving TRS. The terms of the 2006-2012 contract were also very different, and sought to address particular weaknesses that contributed to the failure of the 2002-2006 contract. Another change introduced from the 2006-2012 contract was the use of Section 70 of the Transport (Scotland) Act 2001 (as amended3) as the Government’s funding power, providing greater flexibility to funding arrangements. The terms and conditions and form of contract for the 2006-2012 Northern Isles contract also provided the model for the 2007-2013 Clyde and Hebrides ferry contract. Scottish Executive Ministers had decided that Caledonian MacBrayne Ltd should be allowed to bid to continue to operate its routes early in the preparation for tendering of that network. But in order for that to be possible and to ensure that Caledonian MacBrayne Ltd did not have an unfair advantage, it was necessary to split Caledonian MacBrayne Ltd into separate asset owning and ferry operating companies, with the new asset owning company, Caledonian Maritime Assets Ltd, owning vessels and harbours and leasing them to whichever operator won the contract. Accordingly, the restructuring of Caledonian MacBrayne Ltd that took place in 2006 involved

1 Available at the following internet address: http://www.audit- scotland.gov.uk/docs/central/2005/nr_05122_northlink_ferry.pdf

2 See NorthLink’s website at northlinkferries.co.uk

3The 2001 Act has been amended by the Transport (Scotland) Act 2005

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the creation of Caledonian Maritime Assets Ltd4 and a new group holding company, David MacBrayne Ltd, which is 100% owned by the Scottish Ministers and which in turn now owns CalMac Ferries Ltd5 (which won the 2007-2013 Clyde and Hebrides contract), NorthLink Ferries Ltd (which won the 2006-2012 Northern Isles contract), Cowal Ferries Ltd (which currently operates the Gourock-Dunoon ferry service) and David MacBrayne Ltd HR (UK) Ltd (which provides a range of HR services to CalMac and NorthLink). Given the long lead times involved, the Scottish Government’s Transport Directorate expects to start work in early 2010 on the tendering of the 2012- 2018 Northern Isles ferry contract and in early 2011 on tendering for the 2013- 2019 Clyde and Hebrides ferry contract. Those tendering exercises will also reflect the strategy that is set out in this review of Scottish ferry services and will be undertaken alongside ongoing tendering work for a self-standing contract for the Gourock-Dunoon service. Other ferry services in Scotland Publicly-subsidised ferry services are also provided by four Scottish local authorities namely, Argyll & Bute Council (services to Easdale, Lismore, Luing, and Jura), The Highland Council (Corran Ferry), Orkney Islands Council (internal ferries within Orkney) and Shetland (internal ferries within Shetland). In addition, a significant number of ferry services are provided on a fully commercial basis, notably the services provided by Western Ferries (Clyde) Ltd (Hunter’s Quay-McInroy’s Point), Pentland Ferries Ltd (Gill’s Bay – St Margaret’s Hope) and in other locations. There is no obvious rationale for the existing pattern of ferry service provision, other than historical accident, a matter that is considered in greater depth later in this review. EC Investigation into Scottish Ferry Subsidies The European Commission has taken an interest in the arrangements for ferry subsidies in Scotland over a number of years, including the issuing of a ‘pre- infraction letter’ to the Scottish Executive in June 2005, relating to the Commission’s view that the subsidy arrangements for the Clyde and Hebrides ferry services (including Gourock-Dunoon) did not comply with EU law. The Commission has also taken an interest in successive Northern Isles ferry services contracts awarded since 2002. A formal investigation into the compatibility of these subsidy arrangements with the EU State aid rules started on 16 April 2008 when the Commission wrote to the UK Government following a number of complaints that it had received from interested parties alleging that these subsidies were illegal. We understand that the core issue underlying those complaints was that public subsidies for Gourock-Dunoon and under the Clyde and Hebrides and

4 See Caledonian Maritime Assets Ltd’s website at www.cmassets.co.uk

5 See CalMac’s website at www.calmac.co.uk

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Northern Isles ferry contracts were perceived by the complainants to be anti- competitive and commercially damaging. We co-operated fully with that investigation and the Commission’s Decision was published on 28 October 20096. The Decision found that Scottish Government subsidies for the Clyde and Hebrides and Northern Isles ferry services were compatible with the EU State aid rules and that the subsidies for Gourock-Dunoon would also be compatible, providing an open, transparent and non-discriminatory public tender was launched for this route. We welcome the Commission’s conclusions that the existing Clyde and Hebrides arrangements are compliant with the EU State aid rules and that those for Gourock-Dunoon will also be compliant subject to implementation of a tendering process as described above. We confirmed to the Commission that tendering of the Gourock-Dunoon service would start formally before the end of 2009 and that a new contract will start by end June 2011. More generally, the Scottish Government is aware that a number of interested parties have commented on how the previous and existing public subsidy of Scottish ferry services relates to the provisions contained within the EC Treaty, whether the Altmark criteria are fulfilled and how the Scottish Government should tender particular ferry services. The Commission’s Decision provides extremely clear and detailed explanations of its conclusions, for example on the Altmark case, the compatibility of subsidies with the EC Treaty and the need for appropriate tendering procedures in respect of the Gourock-Dunoon route. We believe that the European Commission is best placed to interpret decisions made by the European Courts on such matters and decide precisely how the Scottish Government should comply with EU law. The Scottish Government has accepted the Commission’s interpretation on these matters and will comply with all aspects of the Decision that has been adopted. The Gourock-Dunoon tendering requirement The Commission requires the Scottish Government to launch an open transparent and non-discriminatory public tender for a 6-year public service contract on the Gourock-Dunoon route. The tender will allow for a subsidy to operate on the route and the new service will operate without any restrictions being imposed on the timetable. The winning bidder will be allowed an unrestricted commercial vehicle transport service, subject to appropriate accountancy measures and audit monitoring to prevent cross subsidisation from the passenger service to the commercial vehicle service. While the winning bidder will be free to bring in its own vessel solutions, replacing the old vessels currently operating on the route, we have asked Caledonian Maritime Assets Ltd (CMAL) to support the tendering process by undertaking a search for vessels that could potentially provide the service. The Bundling of routes The Decision also accepted that the Scottish Government had been justified in tendering the 26 routes in the Clyde and Hebrides ferry network (excluding

6 The published Decision is available at http://ec.europa.eu/energy/coal/state_aid/doc/decisions/2008/2008_0016_uk_c.pdf.

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Gourock-Dunoon) as a single bundle for what became the 2007-2013 public service contract, as awarded to CalMac Ferries Ltd. In doing so, the Commission accepted that “bundling ensures maximum flexibility of the fleet to best serve the network. For example in case of breakdown of a vessel, the immediate provision of a relief vessel is critical to ensure the reliability of the lifeline services. Relief vessels are also needed in case of poor weather conditions, when vessels have to undertake maintenance works and when there is an unexpected need for increased capacity. At present, CalMac can organise a relief vessel often by managing a series of sequential movements of vessels between routes. It would be more difficult to ensure continuity of services and capacity optimisation if there were a range of operators serving the network. Moreover, the bundling of all routes enhances integration of the network by making it easier to combine safety, quality and environmental aspects of vessel and port operations and to ensure that standards are applied evenly across the network. The United Kingdom’s Maritime and Coastguard Agency Regional Office for Scotland and Ireland has made it clear that the fragmentation of the network may not be the most efficient way to ensure the continuation of safe and reliable services.” The Use of Caledonian Maritime Assets Ltd vessels The Commission’s Decision also accepted that the requirement for CalMac Ferries Ltd, as the winning bidder of the 2007-2013 Clyde and Hebrides ferry contract, to be required to use Caledonian Maritime Assets Ltd’s vessel assets was “a reasonable condition of the tender, taking into account that the Scottish authorities had a clear interest in using already available vessels rather than having to keep them unused or otherwise to dispose of those assets….where Member States’ authorities themselves own vessels or have them otherwise at their disposal, these may be placed at the disposal of all potential service operators under the same non-discriminatory terms…..it is a neutral condition for bidders.” Implications for other public subsidy of ferry services One of the issues that the Commission’s Decision addressed was whether the Scottish Government’s subsidy of ferry services in Scotland could be exempt from notification to the Commission . A Decision from the Commission7 provides that if a ferry operator has an average turnover of less than €100 million and receives an annual subsidy of less than €30 million, or carries less than 300,000 passengers a year, the subsidy does not need to be notified to the Commission. This means that whether there is an obligation to notify the Commission depends on the scale of ferry operation and the level of subsidy provided. The Commission (in its recent Decision) concluded that the subsidies provided to Calmac and Northlink had to be notified.

7 Commission Decision of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest; OJ L 312, 29.11.2005, p.67

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Appendix 10: Defining Routes and Services STEP 1 – DEFINING THE RELATIVE NEEDS OF THE COMMUNITY The purpose of step 1 is to describe the needs of the community in terms of five dependencies, as follows: a. Commuting & business travel dependency How important is the ferry to enable regular commuting and business travel to and from the community. b. Personal dependency How dependent is the community on basic services and facilities from the mainland. c. Supply chain dependency Some communities already have substantial services and facilities and therefore rely on the mainland to supply these outlets. This dependency reflects the extent of this development. d. Export-import dependency The extent to which the community’s enterprises rely on the ferry service for materials and, more importantly, to export finished products to the mainland and wider markets. e. Tourism dependency How dependent is the community on tourism. ------We have benchmarked the community so that we can establish that community’s relative need as described by each dependency. This is summarised as follows8:

a. b. c. d. e. Commutin Personal Supply Export- Tourism g & Chain Import Business Travel Dependencies A Most x important B x C

8 Annex A provides more details on what the community scored against the measure for each dependency.

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D x E Least x x important

The relative needs profile for this community is expressed in terms of a personal and export-import dependency (i.e. those dependencies where the community has scored a category ‘A’ or ‘B’ in order of importance).

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STEP 2 – DEFINE A FERRY SERVICE TO MEET A COMMUNITY’S NEEDS We have chosen four attributes that largely define a ferry service, and crucially will vary depending on the relative needs of the community: a. Crossing time ‘High’ is defined as a crossing time of 75 minutes or less. ‘Middling’ is defined as a crossing time of between 75 and 180 minutes. ‘Low’ is defined as a crossing time of more than 180 minutes. b. Sailings per day ‘High’ is defined as 7 or more sailings per day ‘Middling’ is defined as 3-6 sailings per day ‘Low’ is defined as 1-2 sailings per day c. Operating day ‘High’ is defined as a full operating day, from early morning to late evening ‘Middling’ is defined as a reduced operating day, around a normal working day ‘Low’ is defined as a partial operating day, less than a normal working day d. Days per week ‘High’ is defined as all weekdays and some weekend coverage ‘Middling’ is defined as 3-4 sailing days ‘Low’ is defined as 1-2 sailings days ------We now take those dependencies at step 1 that are categorised as an ‘A’ or ‘B’ and match what we consider a service would ideally look like, in terms of the four attributes, to meet these particular dependencies. This is summarised as follows9:

a. b. c. d. Crossing Sailings per Operating Days per time day day week Proposed Service Profile

9 Annex B sets down the template service profiles for each dependency; Annex C describes the rule set for determining a service profile for each community based on competing dependencies.

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High x x Middling x x Low

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STEP 3 – DEFINE CURRENT SERVICE FOR THE COMMUNITY Given the definitions across the four key attributes at step 2, we have been able to describe the current service profile for the community as follows:

Crossing Sailings per Operating Days per time day day week Actual Service Profile High x x x Middling x Low

That is, the community service profile is defined as:

Crossing Between 75 and 180 minutes time Sailings per 7 or more sailings per day day Operating Full operating day, from early morning to late evening day Days per All weekdays and some weekend coverage week

STEP 4 – DEFINE GAPS IN THE SERVICE In this step we define the gaps in the service by comparing the information at steps 2 and 3. This is summarised as follows:

Crossing Sailings per Operating Days per time day day week Proposed Service Profile High x x Middling x x Low

Actual Service Profile

High x x x

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Middling x Low

Gap Analysis No Change Over- No Change No Change provision

Recommendation(s) That the service profile for the community should be changed from 7 or more sailings per days to 3 to 6 sailings per day. RECOMMENDATION TESTING In recommending a change in the existing service, we need to understand whether expanding or reducing the current service may be warranted. To do this we need to look at the utilisation rate for foot and car passengers (i.e. the ratio of actual passenger numbers to the service capacity). A service expansion may be warranted if the utilisation rate is relative high. A service reduction may be warranted if the utilisation rate is relatively low. The following table shows (a) capacity and patronage data (b) the route- specific utilisation rate (c) the utilisation rate for whole network and (d) whether or not for the route in question, the utilisation rate is above or below the average network rate.

Vessel Patronage Patronage Capacity Now +10 Years a. Route-Specific Patronage Data Foot passengers 1,950,000 380,000 480,000 Car passengers 260,000 80,000 140,000 b. Route-Specific Utilisation Rate Foot passengers - 0.20 0.25 Car passengers - 0.30 0.50 c. Network Average Foot passengers - 0.50 0.50 Car passengers - 0.80 0.80

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d. Difference to average Foot passengers - -60% -50% Car passengers - -63% -38%

We can see from the table that utilisation rates for both foot and car passengers are substantially below the network average at present. We have also projected 10 years forward, based on existing changes in patronage. The conclusions do not change materially.

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Annex A: Scores for the Community Against the Measure for Each Dependency a. Commuting/Business travel dependency Measure is percentage of all trips that correspond to commuting and business travel:

A Most range important B “ C “ D “ E Least “ x important b. Personal dependency Measure is an index of transport (specifically ferry) need. This is an index of population density, car ownership, sites of education and health facilities etc.

A Most range important B “ x C “ D “ E Least “ important c. Supply chain dependency Measure is based on a community level case study.

A Most range important B “ C “ D “ x E Least “ important

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d. Export-import dependency Measure is based on a community level case study.

A Most range x important B “ C “ D “ E Least “ important e. Tourism Measure is the percentage of population employed in this sector.

A Most range important B “ C “ D “ E Least “ x important

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Annex B - Template Services for Each Dependency Commuting and Business Travel Crossing Sailings Operating Days per time per day day week Proposed Service Profile High x x x Middling Low x

A community with commuting and business travel requirements requires a comparatively fast service crossing with a relatively long operating day (i.e. early morning/late afternoon/early evening). The service needs to operate on each weekday at a convenient time for commuters. The service needs to operate for all weekdays. Sailings per day is not (per se) a crucial element. Personal Dependency Crossing Sailings Operating Days per time per day day week Proposed Service Profile High Middling x x Low x x

A community with a high level of personal dependency is described as having few shops or island services and therefore relies on the mainland for everyday requirements. People need then a service that will give them reasonable access to the mainland to shop and access other mainland health and education facilities. The service needs to give people a regular opportunity to travel; therefore days per week and sailings per day receive a ‘middling’ ranking. Crossing time and operating day are less significant. Supply Chain Dependency Crossing Sailings Operating Days per time per day day week Proposed Service Profile High x

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Middling x Low x x

An island with supply-chain dependency has substantial local services but requires supplies from the mainland to maintain these services etc. Days per week clearly figure strongly to maintain these services. The operating day may also be important in some circumstances. Crossing time and sailings per day are less relevant. Export-Import Dependency Crossing Sailings Operating Days per time per day day week Proposed Service Profile High x x Middling x Low x

Export-import dependency attempts to reflect the extent to which a community relies on the ferry service to export goods and produce to the mainland and wider markets. Operating day and days per week are crucial elements for export businesses so have been rated highly. Crossing time may also be important in some circumstances, particularly with perishable goods. Sailings per day are less relevant – the timing of these sailings (i.e. early morning) is the key driver. Tourism Dependency (Summer time-table only) Crossing Sailings Operating Days per time per day day week Proposed Service Profile High Middling x x x Low x

Tourists require a service that allows some access to the island or peninsula but not so insignificant that it jeopardises the well being of the tourist market. Of all four attributes, operating day is least relevant with the remaining three each meriting a ‘middling’ rating.

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Annex C Rule Set for Determining a Service Profile

1. CHOOSE THE RELEVANT TEMPLATE SERVICES FOR THOSE NEEDS AT STEP 1 THAT ARE RANKED AS EITHER ‘VERY IMPORTANT’ OR ‘IMPORTANT’. In our example this means template services for personal and import-export dependency. 2. WHERE THE TEMPLATES AGREE ON THE RANKING FOR A PARTICULAR SERVICE ATTRIBUTE, INSERT THIS UNDER THE ATTRIBUTE IN THE TABLE AT STEP 2. 3. WHERE THE TEMPLATES DISAGREE ON A SERVICE ATTRIBUTE, INSERT THE HIGHEST VALUE THAT THE ATTRIBUTE IS RANKED IN THE TABLE AT STEP 2. For example, the service attribute ‘operating day’ scores a ‘low’ with personal dependency but a ‘high’ with export-import dependency. We therefore score the attribute a ‘high’.

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