Northlink Ferry (F Grahame)

The Leader of Orkney Islands Council, James Stockan, has welcomed the considerable reduction to the ferry fares to both Orkney and Shetland announced by the Scottish Government.

James Stockan said:

“I welcome the Minister’s announcement that there will be a significant reduction in fares on all routes linking Orkney with the Scottish mainland.”

“The Council has been working on this with the Scottish Government for a considerable time. We have long wished to see travel south made more affordable for the people of our islands – and tourists encouraged by cheaper fares to visit Orkney in even greater numbers than they do today.”

“We expect reduced fares to result in considerably more traffic on our external ferry routes, as they have on the West Coast of Scotland. The Minister’s commitment to provide parity with the West Coast routes and an overarching fares policy will benefit our community greatly.”

Local MSP Maree Todd, SNP said:

“Like so many in the islands, I was delighted by the announcement this morning. Since I became a MSP last year, I have  pushed the Scottish Government to take action on reducing ferry fares for the Northern Isles – it is vital for the people I represent in Orkney and Shetland.”

Road Equivalent Tariff (RET) will be introduced on the Pentland Firth Crossing. For the Aberdeen route to both Orkney and Shetland a variant of that scheme will be used due to the distances involved. Passenger fares will be cut by an average of more than 40%, whilst car fares will be reduced by an average of more than 30%. This all applies to ferries operated by Northlink. Pentland Ferries are to receive a subsidy as part of the ferry fares package.

The high cost of the ferries to the Northern Isles has been a burning issue at every election. The expense continues to mount of the Northlink vessels themselves as signed off by Tavish Scott MSP when he was Transport Minister in the Labour/LibDem coalition Government in the Scottish Parliament.  The PFI style deal signed by Tavish Scott MSP in 2005 which allowed the ferries to be built continues to cost the public £millions.

The late Danus Skene explained:

“The present inappropriate ferries costing £100m will cost over £200m over 20 years because of the terms of the financial leasing arrangement with the Royal Bank.”

The review of the next contracts to be awarded for providing ferry services to the Northern Isles is still ongoing. It has been extended so that consideration can focus on whether the direct award of a contract would comply with the complex regulations governing state aid, whilst also satisfying the so called “Teckal exemption”.

Minister for Transport and the Islands in the Scottish Government  Humza Yousaf said:

“It is the Scottish Government’s preference to make a direct award to an in-house provider, but it’s important that the outcome of this review is not prejudged.”

The Teckal exemption (also known as the “in-house” exemption) developed through EU case law means that contracting authorities may award a contract to a supplier without recourse to a regulated procurement procedure, when:

• the contracting authority exercises control over that economic entity that is similar to that which it exercises over its own departments (known as the “control test”); and
• the economic entity carries out the essential part of its activities with the contracting authority (known as the “function test”). (Lexology)

The policy review was originally planned to finish in the autumn, but will now likely go beyond that period to see if an in house bid can get preference.

Praising the reduction in ferry fares by the Scottish Government local MSP Maree Todd, SNP said:

“Travelling by ferry is often not a choice for folk in the islands so it is absolutely essential that ferry travel is affordable for islanders. Lower ferry fares mean a better deal for the hundreds of customers and businesses that depend on the ferry service in the Northern Isles and I am delighted for the local campaigners who got behind this policy and worked so hard to ensure it was delivered sooner rather than later.

“I was elected on a manifesto promise to deliver a reduction in ferry fares and I have been determined to ensure that it was delivered by the Scottish Government. The announcement this morning shows that the SNP deliver on our promises and I hope we can continue to do so for the people of Orkney and Shetland.”

Reporter: Fiona Grahame