Call for CalMac to run north boat

A plea will be made to the Scottish government’s new transport minister for the Northern Isles ferry tendering process to be scrapped when the deal comes up for renewal in 2018.

But proposals by Highlands and Islands Labour MSP, David Stewart, to instead use a legal provision known as the Teckal exemption have been dismissed as “academic” in light of the Brexit vote.

Teckal was developed through EU case law, and concerns whether a public authority can award a contract, without a tender process, to another public body.

Isles MSP Tavish Scott has questioned what may happen if negotiations over the UK’s departure from the EU are still ongoing when the existing contract with Serco ends.

But the Scottish government says all avenues are being explored to ensure Scotland remains an EU member.

It says it has brought questions to the European Commission over how Teckal might be implemented for future ferry deals.

Mr Stewart hopes to persuade transport minister Humza Yousaf that using Teckal could save the Scottish government millions of pounds.

MSP David Stewart
MSP David Stewart

The MSP says, under the terms of Teckal, the ferry award could go to the David MacBrayne Group – the publicly-owned body which holds control over CalMac Ferries Ltd.

Mr Stewart insists there is no need to go through the “ludicrously expensive” tendering process – an exercise which cost the public purse £1.1 million when the process was gone through for the Western Isles service.

“Millions were spent on the tendering process for the Clyde and Hebrides ferries contract and it just does make sense to subject the Northern Isles to more of the same.”

Mr Stewart said the Scottish government had argued that it has no choice but to put ferry services out to tender.

“But independent observers and the trade union movement do not agree.”

Keeping ferries in public sector ownership would seem to be close to Mr Stewart’s ideals. Last year he criticised the 2012 tendering process for the Northern Isles ferry service, which ended up going to Serco. More recently he has been involved in a campaign to keep Clyde and Hebrides ferries in public hands.

“The Teckal exemption is the way you can avoid tendering by very specific and very limited ways. Obviously, I was pushing that for the Caledonian in our Hebrides tender.”

He said the minister had agreed to have a “general discussion” about the proposal in September.

But he said he would not be pushing for the move unless the idea gained the support of both Orkney and Shetland Island Councils.

“In theory, what would happen, is that the service would merely transfer to the public sector operator which would be the David Macbrayne Group, and the vessels would still be owned by RBS anyway and the staff would transfer over.”

Mr Stewart said he had already had a “positive response” from Europe, having been advised by commission officials that ferry regulations allow Teckal exemptions to be made. But that does not take into consideration the vote to leave the EU.

Mr Scott said the Scottish government would be reviewing how it applies European procurement rules over the summer in light of the EU referendum.

Tavish Scott
Tavish Scott

“This is an academic discussion now in light of the Brexit vote,” he said.

“I suspect there will be emergency provisions any government could use to simply role forward the ferry contract in the event of some extraordinary set of circumstances we couldn’t envisage, and that will include the Brexit vote.

“I think that’s more likely at the moment if, by 2017/18, we still don’t know what’s going on with the European Union.”

“All these things are European rules. If we’re not in Europe we won’t have European rules. If we remain in Europe it’s going to be a very different kind of arrangement, and it’s going to take some years to resolve.

“The legitimate question might be are there emergency provisions which allow the contract to be rolled forward in such circumstances.”

Mr Stewart admitted questions may arise over whether European cases still apply to Scots law in the event of Brexit.

“That’s a big question, and I don’t know the answer to that.

“If we were no longer in Europe in two years once the Article 50 is triggered, would then decisions that Europe has to take through the Court of Justice still apply?”

A statement from the Scottish government said “all avenues” were being pursued to secure Scotland’s place in the EU, with ministers holding talks with “key stakeholders” to emphasise that Scotland was “still firmly” a European member.

It said EU law required services to be tendered in the same way they had during previous administrations at Holyrood.

“Trade and business should continue as normal – and we are determined that Scotland will continue to be an attractive and a stable place to do business.

“We remain of the view that European law requires ferry services to be tendered – exactly the same view as taken by the previous Labour/Liberal administration.

“We have, however, approached the European Commission jointly with the RMT Union to establish whetehr the ‘Teckal exemption’ could be applied to future ferry service contracts.

We have approached the European Commission to establish whether the ‘Teckal exemption’ could be applied to future ferry service contracts.

“We await the Commission’s response.”

Chairman of the council’s transport body, ZetTrans, Michael Stout said he believed Mr Yousaf would insist the Scottish government would do all it could to make any new contract “as watertight” as it could.

He said he had held discussions with Transport Scotland as well as Serco and CalMac about procurement costs.

“If you had a very, very clearly defined contract then both companies would save quite a bit on the pre-contract preparation.

“So, if the work is put in to make sure that the contract is absolutely watertight and procurement issues are all dealt with, it means they can still go to competitively tender, but they are not wasting a lot of money.”


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