Stornoway ferry service costs

The Scottish Government has forked out over £90 million for the Stornoway to Ullapool ferry service it has emerged.

Western Isles Council accuses the Transport Scotland of making “bad choices,” saying the money could have bought two desperately needed ships for Cal Mac’s aging, overstretched fleet.

Figures in the controversial funding deal for the MV Loch Seaforth have come to light after her expensive lease was bought out.

Cal Mac charters all its vessels from Scottish Government shipping agency, Caledonian Maritime Assets Limited (CMAL) which commissioned the Seaforth for the Minch crossing.

Lloyds Banking Group has cashed in an contentious lease attached to the vessel for a previously undisclosed sum - now revealed to be £36 million - from the Scottish Government.

The price tag is estimated to be £4 million more than Lloyds group’s book value of the vessel.

That comes on top of £24 million paid in hire fees for the 700-passenger vessel over the past five years.

In addition, around £30 million was spent on pier upgrades to berth what is Cal Mac’s biggest ship - work which critics maintain were not required if a second, cheaper, smaller ferry was acquired for a shuttle service across the Minch.

With about £60 million paid to Lloyds Banking Group for a ship which was built in Germany for £43 million in 2014, ferry minister, Paul Wheelhouse, appears to concede the hire deal was not prudent, calling it a “more expensive leasing arrangement.”

Buying out the lease delivers “considerable financial benefits” and “savings to the public purse” hailed Mr Wheelhouse.

Uisdean Robertson, Comhairle nan Eilean Siar’s transportation chairman said the £90 million price tag is “not a good deal” for the Western Isles ferry network, as the cash would have been better invested in two new boats.

Mr Robertson points out the call for two ferries for the Stornoway - Ullapool route received “clear” community backing in Transport Scotland’s own study into the long-term development of Hebridean ferry services.

“We ended up with a larger ferry which actually has less capacity than the passenger and freight ships it replaced,” he stressed.

“Capacity has reduced and we are seeing the results of that over the last few summers” where locals faced having to wait up to a week to get their vehicle onboard a sailing which was frustrating for urgent travel such as attending funerals.

Transport Scotland has always highlighted MV Loch Seaforth is capable of operating 24 hours a day and has 16% more car-carrying capacity compared to the previous vessel, MV Isle of Lewis.

However, the Seaforth was acquired to replace two vessels - the freight ship, MV Muirneag, as well as MV Isle of Lewis.

Paul Wheelhouse said: “Making sure these lifeline transport links continue to support the communities and businesses they serve, such as for the Outer Hebrides, remains at the very heart of our ferry operations.

“This transaction secures this crucial vessel for the future and in a way that will deliver best value for taxpayer’s money.”

Continuing the rental would have seen a total of nearly £40 million in lease payments going to the banking giant by the time the vessel was due to be handed back in 2022.

Kevin Hobbs, chief executive at CMAL, said: “In the longer-term, purchasing the vessel is more cost effective than continuing a lease arrangement.”

The lease buy out helps “safeguard ferry services” for the Western Isles, he added.

Transport Scotland said: “Despite a £1.9 billion real term funding reduction by the UK Government since 2010, Scottish Ministers have invested over £1.6 billion in the Clyde and Hebrides ferry services and infrastructure since 2007. Eight new vessels have been introduced to the CalMac fleet since 2007 and a further two major vessels are in construction. Last year we announced a £3.5 million Resilience Fund to reduce the risk of vessels on the Clyde and Hebrides ferry services experiencing mechanical failure and have allocated a further £4 million to this Fund in the current financial year.

“We recognise the need to increase fleet resilience further and are continuing to invest in new vessels and ferry infrastructure to renew the fleet. Plans are in hand to renew the Ferries Plan alongside and as part of Transport Scotland’s on-going Strategic Transport Projects Review.”

£90 million Stornoway ferry service costs slammed by comhairle

7 December 2019