The duration of future Northern Isles ferry contracts should be much longer than the current six years to reduce uncertainty and encourage greater investment in the service, according to Scotland’s transport minister.
Keith Brown, who visited Shetland on Wednesday, said there was “no rationale” for having to renew the contract every six years when other transport services such as trains can be contracted out for more than double that time.
Under current EU regulations, the government was obliged to put the contract out to tender in late 2011, resulting in global services company Serco taking over from NorthLink last week. Serco will run the ferry route between Aberdeen, Kirkwall and Lerwick until 2018, but Mr Brown said he would continue to make the case to Brussels for a longer contract when it next comes up for renewal.
“We think we should have a longer period – more stability and more investment could happen that way,” he told this newspaper. “I’ve gone to the European Commission myself and argued that case, and to be fair they seem to be very receptive to that point. We didn’t go out to tender because we wanted to, we did because we had to.”
ZetTrans chairman Allan Wishart welcomed the idea, saying he agreed that it could boost investment in the service.
“It would make it simpler for contractors to invest in new ships, or other ships, because they have a greater payback time on their investment, so I think that would be a positive move,” he said. “The other important part about that is making sure you had the absolutely right specification, and high level of service to all of Shetland’s industries.”
But Shetland MSP Tavish Scott described talk about the length of the contract as “cock and bull” and a “smokescreen” for the SNP’s mishandling of last winter’s tendering process. He said Mr Brown should concentrate on things which he has direct responsibility for as transport minister.
“That is secondary to the fact that this government has completely mishandled the tendering, which is why we could be facing strike action this summer,” Mr Scott said. “Instead of talking about things he can do nothing about, he should sort out the matters that he is responsible for.”
Mr Wishart said there was discontent about the “competitive dialogue” process used in the most recent tendering exercise. It had left the community “quite excluded from getting the details of what was on offer”, he said.
At a meeting with Mr Brown this week, SIC and ZetTrans representatives told Mr Brown they believed a “fixed specification” contract would offer more re-assurance and allow Shetland to have more input earlier in the process.
Meanwhile, newly-installed Serco NorthLink Ferries managing director Stuart Garrett was in the islands this week for a series of meetings. Mr Wishart said he had pressed the case for administration and call centre posts to be spread more evenly around the islands if possible.
Mr Garrett told The Shetland Times he was hopeful that threatened industrial action over possible changes to staff terms and conditions would be averted. He plans to engage with the Rail and Maritime Transport (RMT) union “in due course”.
But he defended plans to introduce zero-hours contracts for some staff, saying they ought to be viewed as an “opportunity not a threat”. He also confirmed that Serco believes there is scope to run the service with fewer staff in some areas, with the detail to be spelled out later this year.
“No business would want to see that there was industrial action – it’s destabilising for the economy, destabilising for the tourist industry, destabilising for the freight industry, but ultimately it’s upsetting for employees.”
Mr Garrett, who has worked for the Isle of Man Steam Packet Company for the past decade, continued: “The last thing anybody wants to see are ships sailing where those vessels are manned up for, let’s say, 600 passengers when it’s patently obvious there’s not 600 people on board.
“Introducing different types of contracts, to my mind, allows you to be more efficient in the deployment of labour. Secondly, the ability to bring staff in to cover peaks and troughs in demand starts to introduce career opportunities locally that there perhaps haven’t been previously.”
Mr Garrett also backed the transport minister’s call for longer contracts in future, saying it felt at present as if the successful company was a “short-term custodian” of the route.
“I would find it very strange if it wasn’t something that any operator would be interested in,” he said. “The longer the time horizon you’re working with, then the more concrete your plans can be. It allows you to invest both in hardware and software, as in people, investing a lot of time and money in making sure that we’re fit for purpose in terms of safety and professionalism and understanding operating systems on board.”