Page last updated at 15:04 GMT, Thursday, 4 September 2008 16:04 UK

Calls for end to ferry monopoly

By Kit Fraser
Political correspondent, BBC Scotland

CalMac vessel
CalMac ferries provide vital lifeline services for island communities

Two of the first submissions to the European Commission inquiry into Scottish ferries have called for the break up of Caledonian MacBrayne's monopoly on Clyde and Hebridean and Northern Isles routes.

They were compiled by two noted transport experts, one of whom is an SNP councillor.

Both argued CalMac was heavily inefficient, with private operators better able to provide services, but the operator has long warned against the risk of "cherry picking" routes.

CalMac, along with Northlink Ferries, is under EU investigation amid complaints that subsidies they received breached competition law.

Roy Pedersen - a transport consultant, SNP Highland councillor and former deputy chair of the authority's transport committee - pointed to the example of Western Ferries and Pentland Ferries.

"In both of those cases, private operators are providing a high-quality service at modest cost to the public - at no cost to the Exchequer at all," he said.

"In that situation, parallel routes are operated by the state sector, the services are heavily subsidised."

The second submission to the Brussels inquiry came from Alf Baird, of Napier University.

In almost all other parts of the world, ferry services are provided by the private sector
Roy Pedersen
SNP councillor and transport expert

"Subsidy is increasing all the time, but that subsidy is being used to finance high operating costs, it's not coming through in reduced charges to the user," said Prof Baird.

"It means the economies of the islands aren't really benefitting. Who's benefitting here is, to a large extent, the ferry operator, staff and management."

Those points, and the example set by CalMac's only current competitors, have chimed with the Scottish Tories' outlook.

The party's Holyrood transport spokesman, Alex Johnston, said: "In both these cases, we see independent ferry operators who are able to compete against subsidised competition.

"That indicates to me that the private Scottish ferry industry, small as it is at the moment, is able to compete on an economic basis.

"That's why it's important that we give them the opportunity to expand and become better at providing public services."

Mr Pedersen has called for CalMac's monopoly to be broken up, by offering each individual route to private bidders instead of lumping almost all Clyde and Hebrides routes into a single bundle.

Both he and Prof Baird argued the state-owned ferry company was serving both taxpayer and island and remote communities badly.

Long inquiry

Prof Baird has gone further, calling for the privatising or scrapping of CalMac - but how would the loss-making lifeline routes be safeguarded and fares protected?

"That is overcome quite easily by the imposition of tariff ceilings on certain routes, if prices can be agreed with an operator," suggested the academic.

"The increases in prices can be kept to certain levels below inflation, perhaps, like the Isle of Man does."

He added: "In almost all other parts of the world, ferry services are provided by the private sector. They are reliable and there's little public concern about them continuing."

CalMac has insisted that maintaining the current situation, where the Clyde and Hebridean routes are offered as a package of 24, best served island communities and the taxpayer.

The operator said allowing private operators to pick the most profitable routes would lead to the need for more subsidy, to keep up existing levels of service provision.

It had become widely accepted, CalMac argued, that the targeting of high-value routes would pose a substantial threat to the future of subsidised lifeline services.

The European Commission investigation is expected to last up to 18 months, but these early submissions may set Brussels on a course of demanding radical reform of Caledonian MacBrayne - for so long as much a part of the Highlands and Islands as rain and midgies.


SEE ALSO
'Time to break up' ferry operator
17 Jun 08 |  Scotland
Ferry companies claim 'squeeze'
13 May 08 |  Scotland
CalMac ferry contract confirmed
20 Sep 07 |  Highlands and Islands

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