'Doubt' over CalMac new ferry contract from October
It comes as some ferry users raised concerns over why the Scottish Government agreed to give state-owned CalMac licence to continue operations.
The Cabinet Secretary for Transport Fiona Hyslop had previously said she "fully expected" the direct award would be a "catalyst for positive change".
It has been estimated that the subsidy for the running of over 30 lifeline ferry routes over a new ten year period would soar to £370m-a-year from just over £120m a year in the the last eight-year contract period.
CalMac's £975m eight-year contract expired in September 2024 but it was given an extension last year while ministers consider the legal implications over the direction in which it wants to go over the running of lifeline services.
Fiona Hyslop (Image: NQ) The Scottish Government had previously said direct award with no contest from other potential bidders is the preferred option – closing the door on opening routes up to private operators.
A final decision after a due diligence process was expected by the summer of last year with an aim to have the new arrangement in place by the following October.
The Scottish Government which has been carrying out due diligence over whether it can go ahead with awarding a long term contract to the under-fire ferry operator says that considerable work has been involved in putting arrangements in place for the direct award of the new Clyde and Hebrides Ferry Service contract to CalMac.
But Ms Hyslop's statement to the Scottish Parliament raised concerns from some that there remains uncertainty over ferry operations.
One ferry user group official said: "Stating there is an intention to offer the contract is indefinite and takes us but to when they said it was a preferred option. I do wonder if that was an error on her part but it appeared to be a prepared statement.
" Islanders need to know where they stand on these lifeline services. If there remains questions over the future operation of our service, then we need to be clear what that is.
"There is a belief that the contract for ferry services should be put out to competitive tender, but I have always felt that the future of lifeline services could be plunged into limbo if firm decisions were not made now. Although it wouldn't mean as I have said before giving the contract to CalMac by default.
"The Scottish Government needs to be clear in its communications on this."
CalMac had previously said it was "confident" that the contract will be extended or renewed under a direct award from October this year.
On direct award, a source from the Scottish Government's Transport Scotland agency previously said: "Such a significant decision requires an appropriate level of governance to allow ministers to be in a position to make that decision formally. As we have made clear with stakeholders during recent engagements - none of the due diligence has highlighted any issue that would prevent a direct award from proceeding."
Read more from Martin Williams:
When asked by MSPs why she decided to make the direct award, Ms Hyslop said : "This is a unique opportunity to change the emphasis from a commercially driven arrangement to public focused service, wholly directed and meeting the important and particular needs of island communities.
(Image: PA)
"A direct award will enable Scottish ministers to have greater influence over strategic objectives and significant decisions relating to the provision of the Clyde and Hebrides ferry services.
"This will provide the flexibility needed to drive improvements and adapt to the evolving needs of our island communities."
Ministers have been contemplating the feasibility of the direct award approach from a financial, operational and legal perspective, and it has been confirmed that the due diligence has not highlighted any issue that would prevent the direct award happening.
That's despite the UK government business regulator telling Scots ministers to clearly explain how its refusal to privatise lifeline ferry routes would not result in cheaper costs to the taxpayer as it emerged costs are set to treble.
One advantage cited for a direct contract is a saving on the tender process. The Scottish Government has estimated that the costs of tendering the 2016 to 2024 contract was £1.1m. But that included a £439,000 bill for consultancy support.
Angus Campbell, chairman of Cumbrae Ferry Users Group was among those to raise concern over the award and that it should have gone to competitive tender.
He said he was not convinced necessary changes that need to be made within CalMac had been made.
He gave the example of the Cumbrae Ferry Users Group lodging a past protest with the transport secretary Fiona Hyslop about a sudden 20% reduction in services to and from Great Cumbrae brought in by CalMac.
The Ferries Community Board - formed as part of CalMac's previous franchise bid for the contract to be the voice of the communities - told ministers before the award was made that the "majority" view was that the contract should go out to tender to "test the market for best value and encourage innovation and best practice".
It said that the response was "very much in the context of real anger and disappointment at how the existing contract was managed and also the decision making at senior management level both at CalMac and Transport Scotland".
And Mr Campbell said the position had not changed as it reflected the strong feedback from the communities to the board across the CHFS area.
Former First Minister Humza Yousaf, when he was transport minister, indicated in 2017, the year after CalMac was last awarded the Clyde and Hebrides Ferry Services contract that CalMac should get a direct award.
At the time, the UK was in the European Union and Mr Yousaf said that he was going to "work hard" to satisfy the European Commission that it will meet its state aid rules.
The decision scrap the tender process ended up being delayed and delayed due to the need for thorough due diligence. This includes assessing the financial, operational, and legal feasibility of a direct award to CalMac under what is called the Teckal exemption.
The Herald has approached Transport Scotland for clarification.
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