Thursday, February 6, 2020

What Will be the Fate of the Ferries Destined to Run Lifeline Island Services in Scotland?

As Two Ships Lie Idle and Unseaworthy Who is to Blame and What Can be Done?
Shipping News Feature

UK – The continuing row over the purchase of two new ships for the lifeline ferry routes to and from the Inner Hebrides, and possibly beyond, is simmering with accusations of favouritism and incompetence with strong words in the Scottish Parliament in recent days.

As ever, when the destinations involved are somewhat isolated and remote islands, no matter where in the world, with a population dependent on mainland supplies just to survive, the arguments tend to inflame passions to a fever pitch.

The situation is almost a microcosm of the current HS2 debate. In October 2015 the state backed Caledonian Maritime Assets (CMAL) announced the purchase of two 100 metre long ferries, both being for service with west coast ferry operator CalMac, at a cost of £97 million from Glasgow shipyard Ferguson Marine, the last remaining ship builder on the River Clyde and a company well versed in constructing ferries for CalMac.

Having gone through numerous identities since beginning as a family firm in 1903 the company as it then was, went into administration in 2014, only to be rescued by a private buyer who renamed it Ferguson Marine Engineering. The order from Caledonian Maritime Assets Limited (CMAL) for the two ferries for service with CalMac, was seen as a lifeline for the yard and followed the successful delivery of two smaller hybrid electric/diesel ferries in the preceding two years for the same buyer, with a third under construction.

The awarding of the contract for the two larger ships was an affront to many. Critics say the specification is far too high for the vessels. They were designed to use low pollution emitting LNG fuel or conventional diesel oil and it was seen to be questionable if this was practical given the short passage distances between their terminal ports and the difficulty in providing the LNG to the vessels in Scotland. Other sources describing them as mini cruise ferries when serving a route which is ‘a utilitarian shuttle ferry, basically a bus’. More severe criticism has however also been made.

Ferguson was finally acquired by the Scottish government having gone into administration once more last year. Now an inquiry into the whole affair is under way with accusations of incompetence, vested interests and even corruption bandied about after it was revealed that Ferguson’s bid was the highest offer received out of the six tenders lodged for the contract.

Questions at the inquiry by the parliament’s Rural Economy and Connectivity Committee in Holyrood have asked why, when other bids were for lower specification ferries more suited to the task, Ferguson were awarded the contract and yet now, with two years of unexplained delays, the estimated final cost will more than double. Amounts up to an extra £110 million have been mentioned.

Members of the CalMac community board, a panel set up by the ferry company to represent the views and opinions of its customers, told the inquiry that the delay to the ferries has caused serious problems. Sometimes no ferry has arrived for five consecutive days leaving the islands short of supplies, including essential medical goods.

The Scottish government has been quite open in its desire to protect what is both a practical and symbolic industry with a spokesperson saying that the tender was assessed on two major factors, the quality of the design and specification, and the price. In this regard the government says it believed the Ferguson bid achieved the highest overall evaluation score. Tellingly however the priorities were also to ensure the two ferries were completed, thus maintaining employment at the yard and securing its future.

Opponents are now saying the project should be scrapped and one of the Scottish Government’s Ferry Industry Advisory Group, Roy Pedersen, said three things spring to mind when the matter is discussed, ‘one is incompetence, the other is vested interest and the other is corruption’. He continued:

“Why build a ship with a capacity of 1,000 passengers for a route, namely the Uig routes, on which there has never been more than 312 passengers carried on any sailing, and when the average carryings are half that and in the winter time even less than that? It’s good business practice when you are on a losing run to cut your losses and start again, same when playing poker. It doesn’t do to keep putting good money after bad. From that point of view just looking at the numbers it seems to me the best option for this is to stop, start again.”

In previous years two ferries for the Scottish company Western Ferries were constructed by Ferguson’s in 2001 and 2003, however the next order for the company for two similar craft was won by the Liverpool yard of Cammell Laird and both launched in 2013 at a total cost of just £7 million and making them the first new complete ships to be built at the yard since the submarine HMS Unicorn was launched in 1992.

So why has the project run into so much trouble? Much it seems maybe explained by the relationship between the ferry operating company CalMac, and Caledonian Maritime Assets Limited (CMAL) which owns the ferries, ports, harbours and infrastructure for the ferry services serving the west coast of Scotland, the Firth of Clyde and the Northern Isles and is a wholly owned public corporation of the Scottish Government, with Scottish Ministers as sole shareholders.

For years there have been stories and rumours that all is not well between the two. It was EU rules, now presumably redundant, which insisted that there had to be a separation between the ferry operator and the ship owner. Until 2006 Caledonian MacBrayne, also owned and annually subsidised by the Scottish Government to maintain services ran the whole show.

In October of that year an open public tender for the island ferry services served was deemed essential to comply with the EU rules regarding state aid and competitive bids for public services and the result was the creation of the two new companies, Caledonian Maritime Assets (CMAL) and CalMac. Under this arrangement CMAL owned the assets; ships which were operated by CalMac, ports and port facilities being mostly operated by CMAL, thus allowing an extra layer of state owned management to make a pig’s breakfast of the arrangement.

CEO of CMAL until 2014 was Guy Platten who has gone on to become the current Secretary General of the International Chamber of Shipping. In 2013 he gave an interview saying the ‘two leg’ division of ship/harbour ownership and ferry operation was a good model but admitted to ‘occasional tensions’ between the two sister companies.

A year later Guy Platten was gone and his successor was Tom Docherty, under whose regime the two ferries under discussion were ordered, only to see him depart in April 2016 when current boss Kevin Hobbs took over. The design of the ferries was given to a Portuguese company Vera Navis whose design concept was accepted.

However the relationship between CMAL and CalMac was said to have become ‘caustic’, particularly as there appear to have been an assortment of design changes, many involving steelwork modifications, with talk of works commencing before type approval had been granted by Lloyd’s Register and a lack of communication between Ferguson’s yard, the client CMAL and CalMac.

Now the affair has deteriorated into a mud-slinging match with the criticism of ex-chairman at Ferguson Marine blaming CMAL for all the problems and now a riposte from Kevin Hobbs that the blame lies with the Clydeside yard ‘fairly and squarely’.

So, with the first of the ships, Glen Sannox lying uncompleted and idle in her riverside berth and her sister yet to be fully constructed, it remains to be seen whether the vessels will ever sail the Arran and the Hebrides routes they were bound for. The current state of things is described fully in the Scottish Government report released in December 2019. To paraphrase just a section:

’The project has suffered lack of project management where no one person has understood and controlled the overall programme - no useful management information - specifications not understood before design work carried out causing significant reworking - vessel 801 (Glen Sannox) in the water 2 years, care and protection poor resulting in equipment damage - vessel 802 on the berth 2 years paint protection degraded rain water ingress to both vessels’.

Now the question simply remains whether the two ships are cancelled or, to quote the Scottish play, the government is ‘in blood stepped in so far that should I wade no more, returning were as tedious as go o’er.’

Photo: The Glen Sannox sits forlornly on her berth. She was launched with no windows on her bridge so black paint was used to give her the appearance of having them fitted.