The New Northern Isles Ferry Service & Franchise by Bill Davidson, Chief Executive, Northlink Ferries Ltd.

Bill Davidson, Chief Executive, Northlink Ferries Ltd. addressed the Scottish Region meeting of 25th October 2006 in Edinburgh on the Northern Isles Ferry Services provided by his company. He began by outlining the background to the setting up of the company and its first few years of operation through what could be described as "stormy waters".

Mr. Davidson provided some background to the present position. P. & O. Scottish Ferries had been operating the service from the Scottish Mainland to the Orkney and Shetland Isles for over 30 years and received government subsidy. In 1998 tenders were invited to operate the ferry services with new ships from 2002. New ships were required due to changes in EU safety requirements. A new company, NorthLink Orkney & Shetland Ferries Ltd, was formed to bid for the contract and was successful in it's tender.

However, once the contract had commenced operation, the company ran into financial difficulties, caused by the start of a competing commercial service. This led to the early retendering of the contract by the Scottish Ministers. Following the tendering process, in which three bids were received, the Scottish Ministers decided to award the contract to a new company, Northlink Ferries Ltd. In July 2006. This company is 100% owned by David MacBrayne Ltd, which is in turn 100% owned by the Scottish Ministers. David MacBrayne Ltd. is also the parent company of CalMac Ltd.

The company provides a subsidised "lifeline" ferry service and the amount of subsidy for 2006 is in the region of £31 million. The contract is to provide a service to the specification that sets out the timetable, fares and other details relating to the service. To meet it's commitments, the company operates three vessels on the main ferry routes and Mr. Davidson provided brief details of these.

The Hjaltland (the old Norse name for Shetland) and Hrossey (the old Norse name for Orkney) are sister ships operating on the Shetland - Orkney - Aberdeen route. Entering service on 1st October 2002, both ro-ro ferries are 125 metres long with a beam of 19.5 metres. With a gross registered tonnage of 12,000 and powered by 4 engines, these vessels can achieve 24 knots. They were built by Aker Finnyards in Finland and cost in the region of £35 million each. They can accommodate 600 passengers (300 berths) and have over 450 lane metres of commercial traffic with additional space for cars in a lower deck. The ships have been fitted out to very high standards and are orientated towards those with mobility impairment. The restaurants make use of a lot of produce grown on the islands such as Shetland lamb and Shetland organic cod, along with other local produce.

The third ship is the Hamnavoe (the old Norse name for Stromness) which operates on the Stromness - Scrabster route, providing three return journeys across the Pentland Firth daily throughout the year. The Hamnavoe is a 112 metre long ro-ro ferry and has a passenger capacity of 600 (32 berths) and over 450 lane metres of traffic. Powered by two diesel engines, this vessel is capable of 19 knots. The company also operates the Hascosay (named after one of the small uninhabited islands in Shetland). This ex-Baltic freighter was built by West Bygg 238 A/S of Norway and was formerly the Oslo registered "Sea Clipper". It is used to carry cargo and livestock between Shetland, Orkney and Aberdeen. Extensively re-built in the early 90's, the ship was refurbished in 2002 An additional ship, the 5,000 tonne Clare is currently under charter to the company for freight operations.

Further difficulties faced the company as a new pier being built at Scrabster to accommodate the Hamnavoe was not completed until September 2003, and NorthLink was forced to bring in a substitute CalMac vessel, the Hebridean Isles, which was less suitable, but necessary to maintain the service until the pier was opened. The Northlink services have operated reliably and the company has achieved significant growth in passenger traffic in its first three years of operation. Between Lerwick and Aberdeen, there has been a 54% growth in traffic whilst the Orkney service has seen an increase in the number of passengers travelling annually from around 20,000 to 50,000. The Scrabster to Stromness service has seen less growth, but this is due to the presence of a competing ferry service. The new contract includes the provision of freight and livestock services and some 100,000 sheep and 35,000 cattle have been shipped from Orkney. In 2005 the North link ferry services carried 301,000 passengers and 67,000 to and from Orkney and Shetland.

The success of the services has led to some areas that are being looked at with the aim of improving the services. There is now a shortage of berths at certain times of the year and the company is looking at ways of increasing the number of available berths. Integration of the services with other modes of transport is also seen as an area for improvement. Arrival and departure times have been carefully worked out to provide the optimum timetable, but the contract requires Ministerial approval for changes to timetables.

The company is keen to maintain it's close links to the community and has it's call centre in Kirkwall, Orkney. Whilst the crews are employed by a Jersey based company, the company recruits locally where possible and has a cadet training scheme. Mr. Davidson rounded off his talk by briefly looking at a number of issues including those relating to new freight and livestock pricing as well as new livestock containers that the company is currently addressing. There were many and varied questions put to Mr. Davidson on the services and these were answered in detail, before the meeting was concluded.

The Scottish Region would like to thank Bill Davidson for addressing the meeting and Edinburgh City Council for providing the accommodation and refreshments.

Report by John Fender.