Western Isles Ferry Services

TRANSPORTATION AND INFRASTRUCTURE COMMITTEE 16 APRIL 2014

WESTERN ISLES FERRY SERVICES

Report by Director of Technical Services

PURPOSE OF REPORT To provide the Comhairle with an update on matters associated with the delivery of ferry services to the Western Isles.

COMPETENCE

1.1 There are no legal, financial, equalities or other constraints to the recommendations being implemented.

SUMMARY

2.1 The inaugural meeting of the Outer Hebrides Ferries Task Group, facilitated by the Comhairle, was held on Tuesday 11 March 2014 at which it was agreed that the remit of the Group was to develop and implement a coordinated, structured, fully-informed and evidence-based strategy to engage with Scottish Ministers, Transport Scotland, Caledonian Macbrayne (CalMac), Caledonian Maritime Assets Ltd (CMAL) and other relevant stakeholders seeking to improve the standard, the capacity, the scheduling and the affordability of ferry services to the Outer Hebrides ensuring the demands and aspirations of all sectors of the community are met.

2.2 The Draft Minute of the meeting and the proposed Action Plan are included at Appendix 1 and 2 respectively to the Report for the information of the Comhairle.

2.3 In addition to the meeting of the Task Group, a meeting of the Hebrides Ferry Users Group, facilitated by HITRANS, was held later that same morning and was attended by senior representatives from Transport Scotland, CalMac Ferries Ltd and Caledonian Maritime Assets Ltd (CMAL). The recurring themes between the two meetings were:

• The lack of information from and consultation by the ferry operator regarding services to be in place following the introduction of the MV Loch Seaforth on the Stornoway Ullapool route • A significant concern regarding the capacity of the new vessel, particularly in the context of the HITRANS/OHTIA study • The adequacy of the pilot trial of the Mallaig Lochboisdale service

2.4 The Scottish Government Ferries Plan, published in December 2012, gave an undertaking to carry out a comprehensive review of large commercial fares. The inaugural meeting of the Scottish Government Ferry Freight Fares Working Group was held on 24 February 2014. The remit of the review and the associated research work was agreed and focussed on seeking to establish a fares structure for all large commercial vehicles (CVs) across all Scottish Government subsidised ferry services that is simple and transparent, does not advantage one part of the network over any other part, and balances the well-being of communities against the public sector cost. It is also proposed that the outcomes include the development of an over-arching set of principles and procedures for the setting of “other freight” fares across all Scottish Government subsidised ferry services

2.5 The Working Group will oversee the research to be undertaken over the next six months and it is anticipated that the final report will be considered by the Group in Autumn 2014 before forming the basis of advice by Transport Scotland’s Ferries Unit to Ministers.

RECOMMENDATIONS

3.1 It is recommended that the Comhairle note the Report.

Contact Officers: Iain Mackinnon, Director of Technical Services Background Papers: None Appendices: 1 Minute of Outer Hebrides Ferries Task Group 11 March 2014 2 OHFTG – Draft Action Plan (March 2014)

OUTER HEBRIDES FERRIES TASK GROUP

4.1 Following a well-received presentation by representatives from the Outer Hebrides Tourism Industry Association (OHTIA) on behalf of the Highlands and Islands Transport Partnership (HITRANS) to the Transportation and Infrastructure Committee in November 2013, the Comhairle agreed to establish a Ferries Task Group to “develop the economic case for additional investment in ferry services serving the Outer Hebrides and to lobby both Transport Scotland and Caledonian Macbrayne to address the shortcomings in capacity of these services”.

4.2 The inaugural meeting of the Task Group was held on 11 March 2014 and the Minute of that meeting is included at Appendix 1 to the Report.

4.3 Subject to the agreement and incorporation of measures for success, it was agreed that the remit of the Group should be to develop and implement a coordinated, structured, fully-informed and evidence-based strategy to engage with Scottish Ministers, Transport Scotland, CalMac Ferries Ltd (CalMac), Caledonian Maritime Assets Ltd (CMAL) and other relevant stakeholders seeking to improve the standard, the capacity, the scheduling and the affordability of ferry services to the Outer Hebrides ensuring the demands and aspirations of all sectors of the community are met.

4.4 It was also agreed that the membership of the Group was to comprise representatives from the following organisations:

• Comhairle nan Eilean Siar (CNES) • Highlands and islands Enterprise (HIE) • The Highlands and Islands Transport Partnership (HITRANS) • Outer Hebrides Commerce Group (OHCG) • Outer Hebrides Tourist Information Association (OHTIA) • Stornoway Port Authority (SPA) • Federation of Small Businesses (FSB) • Uist Community Councils Association (UCCA)

4.5 A brief overview of the results of surveys undertaken by the OHTIA and the FSB was given and it was agreed to invite David Richardson, FSB Development Manager (Highlands and Islands), to the next meeting of the Task Group.

4.6 The key actions for the short to medium term were discussed and a draft Action Plan, to be finalised and agreed at the next meeting of the Group, is included as Appendix 2 to the Report.

4.7 A major concern of the Group relates to an apparent lack of consistency between the capacity issues highlighted in the OHTIA study and CalMac’s suggestion, as made in the letter from its Managing Director of 24 January 2014, that “their methodology is extremely simplistic and it is important to be clear on what it shows because it most definitely does not show capacity constraints on the service”.

4.8 HITRANS has agreed to engage with the OHTIA in carrying out similar research during the Summer period of 2014 and, to reduce the likelihood of any “disconnect” between their survey results and any actual capacity issues found by CalMac, the work will be carried out in collaboration with the ferry operator.

4.9 A further concern of those attending the meeting was a lack of information from and consultation by the primary stakeholders responsible for the delivery of ferry services, ie Transport Scotland, CalMac and CMAL, particularly in the period leading up to the introduction of the MV Loch Seaforth on the Stornoway Ullapool route. The existing consultation arrangements provided for in the Clyde and Hebrides Ferry Service (CHFS) public service contract through the Hebrides and the Argyll Ferry Users Groups, facilitated by HITRANS were not considered sufficient or fit-for-purpose, specifically as a result of a lack of meaningful engagement and participation by Transport Scotland, CalMac and CMAL in the past.

4.10 This was, however, substantially addressed by the attendance at the meeting of the Hebrides Ferry Users Group held on the same date of senior representatives from Transport Scotland, CalMac and CMAL.

4.11 Details of the proposed arrangements associated with the introduction of the MV Loch Seaforth were provided by CalMac and undertakings were given by representatives that there would be consultation in the period leading up to the publication of timetables for summer 2015.

HEBRIDES FERRY USERS GROUP

5.1 A meeting of the Hebrides Ferry Users Group was also held on Tuesday 11 March 2014. As indicated above, the meeting, facilitated by HITRANS, was very well attended by senior representatives from Transport Scotland, CalMac and CMAL.

5.2 Representatives from the Comhairle and other participating bodies were afforded the opportunity to seek clarity from those involved in the operating of the ferry services. A number of recurring themes emerged:

5.3 It was confirmed that, after its naming and launching ceremony scheduled for Friday 21 March 2014, the MV Loch Seaforth is to enter service on the Stornoway Ullapool route on 8 September 2014, the date on which the 2014 Summer timetable ends. It is proposed that the new vessel will follow the current timetables run by the MV Isle of Lewis and MV Clipper Ranger over the Winter period with two “normal” sailings per day during the day and a single “freight” sailing in the very early morning.

5.4 Representatives from CalMac confirmed that there would be full consultation with stakeholders through the Hebrides Ferry Users Group in developing a new timetable for the Stornoway Ullapool route for Summer 2015.

5.5 It was indicated that the introduction of the new vessel would represent a significant increase in vehicle capacity. Concerns were expressed about the legitimacy of this claim and CalMac confirmed that they would be happy to work with the Comhairle and HITRANS to demonstrate this. They also confirmed that they would be happy to work with HITRANS and the OHTIA in seeking to address the capacity issues highlighted by them in their recent research.

5.6 With regard to the Mallaig Lochboisdale ferry service pilot, it was pointed out by CalMac that the weather and sea conditions over the first winter trial period had been particularly bad and had severely impacted on the frequency of successful sailings. CalMac did point out that this was the first year in a three year trial and asked for patience and the cooperation of the communities during the trial period.

5.7 It was agreed the next meeting of the Ferry Users Group be scheduled for early Autumn 2014.

SCOTTISH GOVERNMENT FERRY FREIGHT FARES WORKING GROUP

6.1 The Scottish Government Ferries Plan, published in December 2012, gave an undertaking to carry out a comprehensive review of large commercial fares and Transport Scotland has now proposed that the objectives of the Ferry Freight Fares Review are:

• Deliver a new fares structure for large commercial vehicles to be implemented across all Scottish Government subsidised ferry services that is: simple and transparent; does not advantage one part of the network over any other part; and balances the well-being of communities against the public sector cost

• Develop an over-arching set of principles and procedures for the setting of “other freight” fares across all Scottish Government subsidised ferry services

6.2 Commercial vehicle (CV) fares on Scottish Government subsidised ferry services have been set using a number of different regimes over recent years:

• CV fares on Clyde and Hebrides ferry services, operated by CalMac Ferries Ltd, are applicable only to large CVs. Prior to 2008, CV fares on these routes were set on a route-specific basis. In October 2008, the Road Equivalent Tariff (RET) pilot scheme, which involved setting fares on the basis of the cost of travelling an equivalent distance by road, was introduced on the Western Isles, Coll and Tiree for all passengers and vehicles, including CVs. Under the RET pilot, a single structure for CVs was applied across all routes within the Western Isles, Coll and Tiree. In Spring 2012, RET was withdrawn for large CVs and was replaced with a transition scheme with the intention of moving fares back to non-RET levels over three years. The increase in CV fares on these routes was capped at 50% in Spring 2012, 10% in Spring 2013 and 2.7%, in line with the rest of the ferries network, for Spring 2014.

• CV fares on services to and from Orkney and Shetland, operated by Serco Northlink Ferries, are set on a route-specific basis and apply to all CVs regardless of length

6.3 “Other freight” fares on Scottish Government subsidised ferry services are currently set using a range of different historical procedures and charging mechanisms across the ferries network.

6.4 Transport Scotland published a Report in May 2013 which examined the impact of the removal of RET fares from CVs on the Western Isles, Coll and Tiree. The Report, the findings of which were reported to the Comhairle in June 2013, set out a number of options for consideration on a future commercial vehicle fares policy, outlining the advantages and disadvantages associated with each option.

6.5 This next piece of research, to be overseen by the Ferry Freight Fares Working Group, will comprise two components - a review of large CV fares and a review of “other freight fares”. Two separate research reports will be prepared and each will set out how fares are currently set and put forward options for how fares might be set in the future, outlining the strengths and weaknesses and financial implications of each option. Using the outcomes of these reviews, and feedback from the Working Group, Transport Scotland’s Ferries Unit will then prepare advice for Ministers.

6.6 It is anticipated that the research will be completed within approximately six months with the final research reports being considered by the Ferry Freight Fares Working Group during Autumn 2014.

6.7 The Director of Technical Services has been invited to participate in the Working Group on behalf of the Comhairle; regular updates will, where possible, be provided to the Comhairle over the coming months.

Appendix 1 OHFTG - Minute of Meeting 11 March 2014

COMHAIRLE NAN EILEAN SIAR OUTER HEBRIDES FERRIES TASK GROUP

Minute of Meeting held in the Council Chamber, principal Council Offices, Stornoway on Tuesday 11 March 2014 at 9:30 am.

PRESENT Mr John Mackay, CNES (Chairman) Mr Ranald Robertson, HITRANS Mr Uisdean Robertson, CNES Mrs Rachel Mackenzie, HIE Mr Ronald Mackinnon, CNES Ms Gail Robertson, OHCG Mr Roddie Mackay, CNES Mr David Wood, OHCG Mr Alasdair Macleod, CNES Mr Ian Fordam, OHTIA Mr Iain Mackinnon, CNES Mr Donald Macarthur, OHTIA Mr Calum Iain Maciver, CNES

APOLOGIES Ms Jane Maciver, SPA Mr Malcom Burr, CNES Mr Angus Campbell, CNES

IN ATTENDANCE Capt. Angus Smith, SPA Mr Joe Macphee

CONSTITUTION

Appointment of 1 The Clerk chaired the Meeting and called for nominations for Chairman of the Outer Chairman Hebrides Ferries Task Group.

It was agreed to appoint Mr John Mackay as Chairman of the Outer Ferries Task Group.

OUTER HEBRIDES FERRIES TASK GROUP

Role and Remit 2 The Director of Technical Services provided a verbal brief on the proposed Role and Remit of Task Group of the Task Group. The Director stated that Comhairle agreed on 20 November 2013 “… to develop the economic case for additional investment in ferry services serving the Outer Hebrides and to lobby both Transport Scotland and Caledonian Macbrayne to address the shortcomings in capacity of these services” .

On the above basis, it was proposed that the remit of the Group should be to develop and implement a coordinated, structured, fully-informed and evidence-based strategy to engage with Scottish Ministers, Transport Scotland, Caledonian Macbrayne (CalMac), Caledonian Maritime Assets Ltd (CMAL) and other relevant stakeholders seeking to improve the standard, the capacity and the affordability of ferry services to the Outer Hebrides ensuring the demands and aspirations of all sectors of the community are met.

It was proposed that the Membership of the Task Group would comprise of representatives from:

Under consideration of this item it was further proposed that the Federation of Small Businesses (FSB) and the Uist Community Council Association (UCCA) be represented on the Group.

It was agreed to:

(1) approve the proposed Role, Remit and Membership of the Task Group with the inclusion of representatives from the FSB and the UCCA; and

(2) that measures for success and reference to improving the scheduling or timetabling of ferry services be incorporated into the remit of the Group.

Ferries Capacity 3 Copies of a Report and a presentation to the Comhairle’s Transportation and Infrastructure Study – Outer Committee in November 2013 and a copy of the full Review Report on Ferry Availability Hebrides Tourist undertaken by the OHTIA, on behalf of HITRANS, had been circulated to Members as Information background papers to this Item. Mr David Macarthur, OHTIA gave a brief overview of the Association Review Report iterating the findings of the Ferry Availability Review. Mr Macarthur (OHTIA) explained that the data for the report was collected by a daily routine of checking the CalMac online booking system for each sailing covered in the study. This involved checking through all remaining sailings from the day of assessment through to the end of October 2013. Sailings that appeared as ‘not available’ on the system were noted on a master spreadsheet. Therefore the data recorded instances whereby, on the basis of information from the online booking system, capacity on a sailing was unavailable and also the date from which it became unavailable. It became apparent that once a sailing became unavailable it remained so.

On conclusion of the Presentation, Members of the Task Group were given an opportunity to highlight their concerns regarding the current arrangements and to ask any questions.

Mr Ian Fordham stated that the study showed the percentage levels of unavailability across the CalMac online booking system and highlighted the differences between the data gathered by OHTIA and the information provided by CalMac and the question that remained unanswered was - were ferries running at full capacity or not? Mr Fordham further stated that the OHTIA were currently developing a 2020 Outer Hebrides Tourism Strategy on the basis that growth in tourism numbers over the next few years were anticipated at 20-25% and that ferry capacity was a major constraint to this growth.

It was agreed to:

(1) note the presentation;

(2) note that the Comhairle and HITRANS supported the proposal that the OHTIA continue to monitor the availability of sailings on the CalMac online booking system for a further year; and

(3) that the Director of Technical Services would raise the issue of CalMac’s online booking system at the Hebrides Ferry User Group Meeting.

Western Isles 4 With reference to a Western Isles Ferry Survey undertaken in February 2014, the Director of Ferry Survey – Technical Services provided a brief overview of a presentation by Mr David Richardson, February 2014 Development Manager, Highlands and Islands, Federation of Small Businesses (FSB). The questionnaire had been issued to 100 businesses and there had been 39 responses. The Survey sought views on the importance of ferries to small businesses across the Outer Hebrides and presented results on views associated with routes, frequency, capacity, reliability and RET.

It was noted that an Inaugural General Meeting of the Western Isles Branch of the FSB had been held the previous evening in Stornoway, and Mr Norman L. Macdonald had been appointed Chairman. The Group had been reformed after a 14 year gap.

It was agreed to:

(1) note the update; and

(2) on the basis that it had been agreed that the FSB be represented on the Task Group, that the Director of Technical Services invite Mr Richardson to attend the next meeting to give the full presentation on the Ferry Survey.

Ferry Services 5 The Director of Technical Services provided a verbal overview of the consultation processes Consultation in place to monitor and assist in the delivery of ferry services. The process had been Process formerly undertaken through the Shipping Services Advisory Committee; however following the establishment of the Clyde and Hebrides Ferries Service (CHFS) public service contract, the consultation was revised establishing Tier 1 and Tier 2 Consultation Forums. The Director stated that the first line of consultation between island communities and their representative groups and CalMac, as the ferry operator, was facilitated by HITRANS through Tier 1 forums. For the Outer Hebrides, the relevant forums were the Hebrides and the Argyll Ferry User Groups. Tier 2 Consultation Committees, primarily involving the Regional Transport Partnerships and Transport Scotland, were largely concerned with longer term planning and route development.

The Director further highlighted an apparent reluctance by CalMac and Transport Scotland to engage in the Tier 1 consultation process. For example, there had been no formal notification or consultation whatsoever through the consultation arrangements with CalMac on the proposed timetable for the MV Loch Seaforth following its introduction later this year; this was a concern echoed by Members of the Task Group. Another major concern was the anticipated frequency of sailings of the new vessel; despite undertakings given as part of the consultation process and the meeting held in Stornoway on 16 March 2011 that the vessel would be capable of four return sailings per day, it was now widely recognised that this would not be possible. Further concerns raised by the Group were regarding the anticipated reliability and the robustness of the proposed new ferry service and the resilience of the infrastructure at Stornoway and Ullapool ports.

Under consideration of this item it was proposed that the way forward was to meet, at the earliest possible date, with the key players and that the focus of engagement be with the Scottish Government, specifically Mr Graham Laidlaw, Head of Transport Scotland’s Ferries Division.

It was agreed:

(1) to note the update;

(2) that the Director of Technical Services organise a Transport Seminar, inviting key representatives from the Scottish Government, including the MSP for the Outer Hebrides, Transport Scotland, CalMac and CMAL; and

(3) that the above proposals be raised by the Director of Technical Services under AOCB at the Hebrides Ferry Users Group Meeting.

Development of 6 The Director of Technical Services provided a number of slides with key action points and Action Plan areas for improvement, these included:

• New CalMac on-line booking system • Changes to timetables of existing services to enhance capacity • Economic Impact Study • Clarification of timetabling and allocation of vessels on Stornoway/Ullapool route following introduction of MV Loch Seaforth and into 2015 • Rescheduling of Lochboisdale/Mallaig pilot service • Review of current consultation/engagement process • Robustness of proposed service and infrastructure

It was agreed:

(1) to note the key action points; and

(2) that the Director of Technical Services would create an Action Table, taking account of any further key issues raised by Members, for circulation to the Task Group.

Schedule of 7 It was agreed that the Task Group meet on a regular basis and that the next Meeting Meetings would be mid-April 2014.

Appendix 2 OHFTG – Draft Action Plan (March 2014)

Item Key Task / Action Resp Milestone

01 Schedule inaugural meeting of Task Group CnES COMPLETE

02 Agree constitution or terms of reference for Group OHFTG COMPLETE

03 Finalise publication of Ferry Availability Review Report and RR COMPLETE summarise findings IF

04 Undertake economic impact study across tourism and other HIE TBC sectors; quantitative and qualitative impacts of capacity OHTIA shortfall and potential opportunities arising from improvements

05 Identify and agree key areas for improvement:

05a Improved on-line booking system CalMac TBC

05b Provide increased capacity on Stornoway/Ullapool, TS Tarbert/Uig and Lochboisdale/Oban routes CalMac TBC

05c Obtain clarity on proposed timetabling and allocation of vessels on Stornoway Ullapool route following introduction of MV Loch Seaforth CalMac COMPLETE

05d Seek reconsideration of scheduling of Lochboisdale/Mallaig pilot service TS TBC

05e Implementation of RET on Sound of Harris and Sound of Barra routes sooner than “within the term of this Parliament”. TS TBC

06 Submit formal representation to Transport Scotland and OHFTG COMPLETE CalMac seeking meeting with Scottish Government Minister CnES (Keith Brown MSP)

Key CnES Comhairle nan Eilean Siar OHFTG Outer Hebrides Ferries Task Group RR Ranald Robertson (HITRANS) IF Ian Fordham (OHTIA) TS Transport Scotland