Going overboard with a tender

SCOTTISH ministers have announced that tenders will be issued today for the Gourock to Dunoon ferry service in order to meet a European Commission-imposed deadline for completing the procurement.

A statement from the Government says that Ministers have been working for some time on ensuring the community aspiration of a town centre-to-town centre vehicle and passenger ferry service between Gourock and Dunoon could be realised. This continues to be the Government's preferred approach.

The Government has also announced three steps to address Scottish Ministers’ concerns that the imposed procurement route and timescale risks creating a monopoly on the route. These steps include taking the first steps towards examining the case for a statutory ferries regulator.

Last April, four companies were short-listed to bid for the route. Click here

John Swinney, Cabinet Secretary for Finance and Sustainable Growth said: “The Scottish Government is committed to delivering the best possible ferry service for the people of Cowal and Inverclyde and, having exhausted all avenues, is tendering the service within the parameters outlined in the European Commission’s recent decision. We remain confident that the tendering process will be completed by the Commission’s deadline.

“The local community can be assured we have tested the limits to which this procurement can be run.

"Firstly, we have given greater flexibility to CalMac in terms of hours and frequency of operation on their existing Dunoon/Gourock service.

“Secondly, finance is to be available for the development of a local social enterprise company if the community wish to bring one forward quickly with the aim of enabling it to participate in the development of the route.

“And thirdly, the Government is now examining the scope for introducing a statutory ferry regulator which could have strong powers to ensure there is no predatory commercial activity on any Scottish ferry route.”

Mr Swinney added: “We have been working for some time on ensuring the community aspiration of a town centre to town centre vehicle and passenger ferry service between Gourock and Dunoon could be realised.

“Our attention to this issue has been unstinting and has involved, first, working to enable investment in new ferries for the route. This approach proved contrary to the European Union’s Maritime Cabotage Regulation, which has the force of law.

“Secondly, we have been trying to ensure the tender process as required by law did not produce a commercial monopoly for the carriage of vehicles on the route. Early on we discussed with a commercial operator the option of operating on the town centre-to-town centre route as well as on its existing route, with protection for the public interest. This was an offer that the operator was unable to accept.

“Thirdly, the Government approached the European Commission last autumn seeking permission to delay the tendering to explore alternatives. This included the possibility of the community creating a social enterprise which could bid and would keep control in the hands of the community. The Government was unable to confirm this at the time owing to the confidentiality of the process. No comment from the Government was possible given the intense commercial lobbying of the Scottish Government and the European Commission and the ever present threat of legal action from some quarters.

“Unfortunately, the Commission indicated last week that on the basis of present evidence they would not permit an extension to address our real concerns. We regret not being able to persuade them of the continuing danger of monopoly abuse. This is a concern we know is shared by the community.”

Tenders are expected to be returned in March and the contract for the route is expected to be awarded in June 2011.

The tender must be carried out in line with the following parameters:

-- The subsidy will cover only passenger traffic;

-- The public service contract will cover a town centre-to-town centre ferry service by means of a six-year public service contract;

-- The current timetable restrictions will be removed;

-- The operator will be allowed to provide an unrestricted commercial vehicle transport service.

-- The operator will be free to bring in its own vessels, replacing the old vessels currently operating on the route