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Last Updated: Thursday, 6 July 2006, 16:38 GMT 17:38 UK
Islands ferry contract is awarded
Northlink Ferry
The contract is to run the services to Orkney and Shetland
A ferry operator has been awarded a six-year contract to take over services to Orkney and Shetland.

Northlink Ferries Ltd, which replaces previous operator NorthLink Orkney and Shetland Ferries Ltd, will receive 31m in subsidies in its first year.

The new contract provides for freight and livestock to be included for the first time.

Transport Minister Tavish Scott said the deal would secure vital lifeline ferry services for the long-term.

About 78m of public money has been spent keeping ferry services to the Northern Isles afloat, more than double the originally agreed subsidy.

The tender process began in April 2004 and bids were submitted by V-Ships UK Ltd and Caledonian MacBrayne which runs ferry services on the west coast.

These ferry links are crucial to the prosperity and well-being of the Shetland and Orkney communities they serve
Tavish Scott
Transport Minister

NorthLink Ferries Ltd has been formed to deliver the services following the appointment of Cal Mac as preferred bidder in March.

The contract also includes a midweek freight call-in at Orkney, new livestock transporters from 2007 and an improved performance regime.

Mr Scott said: "These ferry links are crucial to the prosperity and well-being of the Shetland and Orkney communities they serve.

Local reaction

"I am confident that this contract offers the best value for public money and will deliver real improvements for anyone using the service."

Reducing freight rates for island businesses will benefit the economies of Shetland and Orkney, the minister added.

"Local crofters and farmers will welcome the new livestock container arrangements," he said.

The new company is wholly owned by ministers, through parent firm David MacBrayne Ltd.


SEE ALSO
CalMac set to secure ferry route
09 Mar 06 |  Scotland
Delay in ferry route announcement
18 Jan 06 |  Scotland
71m spent to keep ferries afloat
22 Dec 05 |  Scotland
Ferry firms shortlist published
19 Jul 05 |  Scotland

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