International services firm wins North Boats contract

10 comments, , by , in News

An international services company with only one other ferry crossing – across the River Thames – has been named as the preferred bidder for the North Boats link for the next six years.

In what will come as a shock for NorthLink, existing operator of the Hjaltland and Hrossey and two freight boats as well as the Hamnavoe across the Pentland Firth, transport minister Keith Brown announced today that Serco would take over the £40.5 million-a-year contract this summer pending the “satisfactory conclusion of contract arrangements”.

Serco has one short service, the Woolwich Free Ferry, which carries over a million vehicles a year. But it has extensive knowledge of marine harbour operations through working for the Royal Navy, putting its ships to sea at its main UK naval bases at Faslane, Portsmouth and Devonport. It manages over 100 vessels and operates tugs and pilot boats. It also maintains RAF aircraft and bases around the country and has the contract to run Scatsta Airport.

The three passenger ferries owned by the Royal Bank of Scotland and the two freight boats Hildasay and Heliar, which are leased from Seatruck Ferries, will be maintained on the run for the full six years and NorthLink staff will transfer to Serco.

Mr Brown said the new contract would require the operator to ensure there is no repetition of the drydock problems experienced with the NorthLink service this year, improve passenger experience, make services available for time-sensitive freight and maintain 90-minute services from Scrabster to Stromness.

Mr Brown said: “The Scottish government is absolutely committed to providing the very best ferry services to Orkney and Shetland to meet the needs of residents, business and visitors alike.”

The announcement, originally expected at the end of March because of the short timescale involved in any new operator getting up and running by July, was delayed when Scottish ministers and civil servants went into “purdah” for the council elections.

SIC chief executive Alistair Buchan said today: “We look forward to receiving the details of the new arrangements. It’s obviously crucial that there is continuity in the provision of Shetland’s lifeline ferry service, and it is important that issues such as the level of service during refit periods are addressed. 

“Shetland’s newly-elected council will obviously look at the matter at the earliest opportunity, and our officers will work hard to support them in safeguarding Shetland’s interests on this crucial issue.”

Isles MSP Tavish Scott said he would speak to Serco representatives early next week to emphasise the importance of the sea link to the mainland.

“I have, this afternoon, spoken to Serco. I congratulate them on winning the contract for the Northern Isles’ lifeline ferry services. I look forward to discussing with Serco early next week the importance of Shetland’s sea links to Aberdeen. I want to make sure that these services are not just maintained but enhanced for the future.

“I would like to thank NorthLink and all their staff for the hard work and commitment they have shown to the islands.”

Mr Brown, meanwhile, insisted the new operator would improve on the NorthLink service. 

“The new contract rectifies many of the difficulties of the one we inherited in particular the recent difficulties with the extended drydock period.

“The new arrangements ensure we will avoid the situation where vessels have been laid up for long periods of time. Hjaltland and Hrossey will not be used to relieve the Scrabster-Stromness route as has happened in the past. A different replacement vessel will be used to cover Hamnavoe‘s dry-dock periods.

“The needs of vital time sensitive freight exports like fish and seasonal livestock and vital imports like supermarket goods will be met, and the services available for passengers will be improved.

“Passengers will see improvements to the journey experience with improved  ticketing arrangements, premium reclining seats added on board overnight services, and improved catering, hospitality and customer care facilities.

“Crucially, clear commitments that crossing times, including the 90 minute crossing between Scrabster and Stromness, will also be retained.

“Given cuts by Westminster to the Scottish government’s budget, it is also essential that we make the very most of every penny spent in Scotland, so we will also see the new contract deliver value for money for Scotland’s taxpayers.”

Mr Brown said Serco Ltd had prepared a “thorough start-up plan” setting out what is required to be done to ensure a “seamless and managed handover” from NorthLink, including transfer arrangements for staff under TUPE regulations, in time for the start of the new service in July.

“Beyond this new contract, there is more we want to do for communities in the Northern Isles.

“We made clear in our Draft Ferries Plans that we see RET as the basis for setting fares in Scotland and have stated our clear aim to implement RET-based fares across every route in Scotland, including the Northern Isles. We will set out next year our proposals on how and when that will take place.

“I look forward to the beginning of the new contract this summer which will ensure that people travelling to and from Orkney and Shetland will continue to have access to safe, reliable and affordable ferry services in the future.”

The total value of the new contract will be £243 million over the six years.

All bookings and reservations made with NorthLink will be honoured by Secro. 

Jeremy Stafford, chief executive of Serco UK & Europe, said: “We are delighted to have been chosen by Transport Scotland for this crucial lifeline ferry service. By drawing on our proven transport and marine expertise, I am confident that we can give passengers and customers a better service and deliver really good value for the Scottish Government. We are very proud of our long record of public service in Scotland, and this contract will be a distinguished addition to that.”

Serco said it operated more ships under the UK flag than any other company, including extensive operations in the international marine market.

Its wider transport experience includes the Northern Rail franchise, Docklands Light Railway, Merseyrail, Dubai Metro, Great Southern Railway, and Transport for London’s Barclays Cycle Hire Scheme.   

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10 comments

  1. So, a company whose only apparent experience in ferry operation is shuttling vehicles across the River Thames in London, is seemingly to be made responsible for three passenger ferries and two freight boats and a 224 mile crossing in some of the worse sea conditions around the UK. I really find this rather scary.

    Apart from Serco capitalising on almost every facet of government outsourcing on previously owned ‘public’ services such as prisons and welfare to work programs, what is equally scary is that Serco’s profits soared 34% to £194.7m in 2010 – so we can only imagine that ferry fares will no doubt increase to appease their shareholders.

    Frankly, I believe Northlink have performed quite well over the years often under difficult circumstances. Perhaps it better to deal with the devil you know – instead of a large corporate diverse entity whose only motive is profit.

    Reply
  2. Douglas Young

    The Transport Minister slipped in that RET would be the aim for the Northern Isles; this would be a massive boost for Shetland, and Orkney, if implemented, as it reduced travel costs to the Western Isles in some cases by 30%. Why have we not heard about this before?

    Reply
  3. Paul Riddell

    Douglas
    RET as configured for the Western Isles would actually be more expensive than the current system for Shetland:

    http://www.shetlandtimes.co.uk/2009/08/04/ferry-fare-pilot-attracts-extra-cars-but-would-be-more-costly-for-shetland

    Best regards
    Paul

    Reply
  4. Dennis Leask

    Dear Paul & Douglas, I have heard so many claims and counter claims as to the effect RET would have on fares to Shetland, but always in the narrative.
    Does anybody actually have some facts and figures?

    Reply
  5. James Mackenzie

    “The Scottish Government remains firmly opposed to the possession, threat and use of nuclear weapons and will continue to play a part in ending nuclear proliferation and promoting early disarmament to the extent that it is able to under current constitutional arrangements. We do not believe that the UK’s determination to spend billions on ensuring a nuclear deterrent and global offensive reach is the right one for our security needs in the 21st century.” (Scotland Without Nuclear Weapons Working Group Report, Scottish Government Response, November 2009)
    “Since 2000 Serco has been entrusted with the management of the UK Atomic Weapons Establishment in a 25 year joint venture with Lockheed Martin and Jacobs Engineering.
    “AWE provides the warheads for the UK’s nuclear deterrent. Uniquely among the nuclear powers, AWE covers the whole life cycle of nuclear warheads in a single establishment – design, manufacture and assembly, in-service support and decommissioning and disposal. AWE operates with an advanced science-based programme, including hydrodynamics, environmental testing, nuclear physics and high performance computing.” (SERCO website)

    Strange bedfellows?

    Reply
  6. Douglas Young

    Paul,

    thanks for that, I understood all Island groups would benefit from lower costs after the introduction or RET. This would appear to be a backward step!

    Reply
  7. Andrew T Gibson

    It might be prudent to book your family summer crossing sooner if there is a chance of price rises!

    Reply
  8. David B Spence

    A quick comparison of RET is simple. Current passenger return (mid season) Ullapool-Sornoway is £33.60 for a distance of 108miles.

    Apply that to the 448mile round trip to Aberdeen from Lerwick and we get a return price of £139 – quite a rise compared to Northlinks £44.38 return.

    It should be obvious without any calculations at all that RET is not a viable option for this route.

    Whilst there could be a lot of improvements in a lot of areas, lets hope the pricing and timetabling we currently enjoy are left untouched.

    Reply
  9. Sandra Brooks

    Given SERCO’s track record of the out of hours contract for G.P. services in Cornwall as stated in Saturday’s Guardian, I certainly feel that the Scottish Government should be reconsidering who would be a fit and proper company to run the ferries between Lerwick & Aberdeen. It is not to late to change their mind.

    Reply
  10. Ron Stronach

    Time will tell of course whether Serco are any better or worse that Northlink. I only used the boat on my last trip home, and it wasn’t a bad experience, the cost for a cabin was rediculous, I only wanted it for a night, I thought they had charged me for a week!

    With the same ships and crews being used the only thing that will change will be the price, hopefully not increased! Same problems with sailings, and delays and Aberdeen Harbour.

    Reply

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