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Friday, 22 December, 2000, 18:04 GMT
CalMac clinches ferry deal
Calmac ferry
CalMac will build three new ferries for the service
Caledonian MacBrayne (CalMac) has clinched a five-year deal to operate ferry services to Orkney and Shetland.

The Scottish Executive has agreed to pay 400,000 a year to NorthLink Orkney and Shetland Ferries, a joint venture between CalMac and the Royal Bank of Scotland.

Transport Minister Sarah Boyack confirmed that NorthLink would take over the running of the service from current operators P&O Ferries in 2002.

The deal, which carries a public subsidy of 11m, provides for three new vessels, more frequent sailings, shorter journey times and cheaper fares for the island routes.

Sarah Boyack
Transport Minister Sarah Boyack
Announcing the contract, Ms Boyack said: "The executive is committed to maintaining lifeline services to the islands and their communities.

"The tendering of the subsidy for the Orkney and Shetland routes has been a lengthy and complex exercise.

"NorthLink, the executive and P&O Scottish Ferries will now work towards ensuring a smooth handover in 2002."

John Horton, project director at NorthLink, said the deal would bring combined benefits to the islands.

Tendering process

"As a separate joint venture company, we've combined Caledonian MacBrayne's considerable ferry operating experience with the financial strength of a major Scottish institution," he said.

The tendering process for the subsidy agreement started in October 1998, with three companies asked to submit bids.

Shetland shore
Ferries provide a vital link to the remote islands
CalMac and the Royal Bank promised an improved timetable with more sailings and shorter journey times on the routes from Scrabster to Orkney and Aberdeen to Orkney and Shetland.

The company also said it was well-advanced in talks with shipyards to build the three new ships.

But earlier this month it was feared the contract could be set back after Clyde shipbuilding yard Fergusons withdrew its bid to build one of the three new ferries.

All three new ferries for the Orkney and Shetland routes will now be built by the Finnish shipping yard Aker.

Confirmation of the contract going to NorthLink means CalMac is now the biggest ferry operator in Scotland.

The deal is a blow to present operators P&O Ferries which employs more than 500 people in the north of Scotland.

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See also:

05 Oct 00 | Scotland
CalMac wins lifeline ferry contract
01 Sep 00 | Scotland
Fears voiced over ferry contract
26 May 00 | Scotland
CalMac given morale warning
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