A judge will announce next Tuesday whether multinational services firm Serco can take over the North Boats operation from NorthLink in July after a day of argument at the Court of Sesson in Edinburgh today.
Streamline, which was unsuccessful in winning the £243 million contract, challenged the government’s decision to award it to Serco, claiming ministers acted illegally.
The firm, which already operates freight services to the isles, claimed Serco’s proposals would result in fewer boats travelling between Shetland, Orkney and Aberdeen.
That, it contended, could have a disastrous impact on the northern Scottish economy.
In court Streamline’s legal team asked Lord Malcolm to prevent the deal between the Scottish government and Serco going ahead.
Streamline’s advocate Jonathan Lake QC told the court that the government was obliged to ensure that the ferry service between the mainland and Shetland and Orkney represented the best value for money for the taxpayer.
Mr Lake said that the difference between Streamline’s and Serco’s bid was that his client was willing to run more services between Aberdeen, Kirkwall and Lerwick.
The court heard that Serco’s bid committed the firm to running fewer services between the three locations than Streamline.
The court also heard that Serco could run the ferry service at a cheaper price than Streamline.
But Mr Lake said this could stop vital goods and products from getting from the Scottish mainland to the islands and from the islands to the mainland.
Mr Lake said this meant Serco should not be awarded the contract. He also said the Scottish government had failed in its task to award the contract to the firm that could provide the best level of service.
Mr Lake said his client wanted Lord Malcolm to stop the contract from going ahead. The advocate also said his client wanted the court to order another competitive tendering process for the contract.
He added: “The correct procedure is for the decision to be cast aside and for it to be re-run again in a lawful manner.”
Solicitor advocate Christine O’Neill, acting for the government, told Lord Malcolm that the government was satisfied that Serco could provide a full and comprehensive ferry service.
She said that civil servants had studied Serco’s proposals and concluded that there was nothing wrong with the plans.
Ms O’Neill also said that Serco’s proposals provided the taxpayer with the best value for money.
She further urged Lord Malcolm to allow ministers to sign the contract with Serco as not doing so could place ferry services between the mainland and Orkney and Shetland in jeopardy after the current deal with NorthLink runs out in July.
She said the Scottish government could spend time and money trying to find ways in which to keep the services in place while a new competitive process takes place.
Ms O’Neill said Streamline had a “very weak case” in law for the decision to award Serco the contract to be set aside.
Lord Malcolm told the court that he would announce his decision on the matter on Tuesday.