CalMac secures ferry contract
Preferred tenderer named for Clyde and Hebrides network.
CalMac Ferries Limited has been announced as the preferred tenderer for the next contract to operate the Clyde and Hebrides Ferry Services (CHFS) network by the First Minister.
CalMac’s bid makes almost 350 commitments to improve the service, aiming to help drive economic growth, improve customer service and make sure the company delivers value for money. Proposals include:
- £6 million investment in vessel and port improvements
- The introduction of smart and integrated ticketing systems on key routes
- Increase passenger/vehicle traffic by 10% and commercial traffic by 12% over the course of the contract
- Providing more opportunities for local employment, including more apprenticeships
- The creation of a new Director of Community and Stakeholder Engagement post and a Communities Board to better involve communities in investment and services decisions
- Retaining its head office in Gourock and maintaining its status as a Living Wage employer
- All existing routes and services will continue to operate as they do now
In addition to these headline proposals, CalMac has committed to retaining the CalMac pension scheme and a policy of no compulsory redundancies.
The tender price for the next contract is around £900 million for eight years from the 1 October 2016.
First Minister Nicola Sturgeon said:
“I’m very pleased to announce CalMac Ferries Ltd as our preferred bidder for the next Clyde and Hebrides Ferry Services contract.
“CalMac have a long and proud tradition of running the Clyde and Hebrides routes, and the company is woven into the fabric of the communities they serve.
“Their tender offers a good deal for those communities served by these vital transport links and ensures that we can maximise the opportunities to support and nurture our island economies.
“CalMac will better manage demand to drive an increase in traffic, as well as make the ferry services more attractive with the introduction of smart ticketing on key routes.
“The Scottish Government has made a clear commitment to our ferry services, investing a record £1 billion in port infrastructure, vessels and services since 2007.
“Scottish Ministers will retain control of all of important issues, such as fares and timetables, through the public service contract. Vessels and port infrastructure will also remain publicly owned as they are now.
“This new contract looks to make further improvements our ferry services, and I look forward to CalMac starting the new contract later this year.”
- It is the Scottish Government’s intention to award the contract to CalMac following a standard 10-day standstill period.
- The 10-day standstill period began on 18 May 2016, when letters were sent to both bidders confirming the outcome of the tender process.
- The decision to name CalMac as preferred bidder follows a competitive tender process, which an independent procurement panel reviewed and commented on was as being fair, open and transparent.
- Further details of CalMac Ferries Ltd’s tender will be given once the 10-day standstill period has passed.
- CalMac’s tender price came in at £900 million for the full eight year term of the contract. This falls within our upper estimate of £1 billion. However, this cost is based on 2014-15 services, to provide a consistent basis for tender prices to be prepared and assessed.
- Before the contract starts on 1 October 2016, the specification of the services will have to be varied to match Ministers’ current requirements. Consequently, the total cost will increase to reflect new services – such as additional routes, an enhanced pattern of sailings, additional vessel deployment and direct investment in franchise transferable assets - such as the new booking and ticketing system to be developed and introduced to support better service for customers. The adjusted costs will remain within our contract estimate and this adjustment would be required, whoever had won the contract.