Response to Consultation on Clyde & Hebrides Ferry Services (CHFS) Draft Specification by The Scottish Policy Group of The Scottish Region of The Chartered Institute of Logistics and Transport (UK)

Introduction
The Institute is the professional body for the full range of professionals engaged in logistics and transport. This includes freight and public passenger transport operators, local and national UK government employees, consultants and academics. Members would be affected by the decisions relating to the consultation issues. The views in this paper reflect the views of the participating members of our Policy Group.

Background
The Consultation Paper summarises and makes comment on the responses made from the previous round of consultation held in 2002. The Paper requests that consultees make a further response to issues concerning the services and timetables including some specific routes. The Paper also invites views on issues to be considered as part of the planned research during the first part of the contract.

Timetables and Services (sections 18 -19)
The CILT (UK) accepts that the level of network timetabling and service provided, given the restrictions of the fleet and taking into account financial considerations, is probably at an optimum level. However, we are aware of the immediate need to provide additional car deck capacity on the Inner Isles route during the winter months and to this end suggest that an alternative method of covering vessels undergoing annual refit with MV Clansman (which acts as network relief vessel) be considered and that such vessel be retained on the Inner and Outer Isles service over the entire winter timetable.

The Small Isles (sections 20 - 22)
It is our understanding that Caledonian MacBrayne is already in dialogue with the Small Isles communities concerning their preferences for changes to the weekend timetable and suggest that these communities be allowed to decide amongst themselves.

Lismore (sections 23 - 28)
While supportive of the view that island communities should, in the main, decide amongst themselves about timetable options, CILT (UK) gives greater emphasis to the promotion and development of an integrated public transport network. (In other responses, we have emphasised our general support for this.) We suggest that the current service provision with the island being served by a passenger and vehicle vessel be retained. The potential removal of a passenger and vehicle link to Oban is viewed as being detrimental in terms of service provision for the island and would undoubtedly disadvantage transiting foot passengers (intending to use connecting FirstScotrail and Citylink services to Glasgow ex Oban), the young (school children travelling to and from Oban High School on Mondays and Fridays), the elderly (many of whom are not car owners and are reliant on the shops and services available in Oban) and the infirm (patients travelling to and from the hospital in Oban). Vehicular traffic to Lismore tends to be dominated by the movement of agricultural vehicles. To this end the proximity of numerous agricultural suppliers and the presence of the mart in Oban would suggest that a vehicle service ex Oban is also fully justified.

Mallaig - Lochboisdale (section 29)
The CILT (UK) understands that Caledonian MacBrayne has commissioned a study based on a STAG approach to assess the viability of providing a service between Mallaig and Lochboisdale. We understand that the findings on this are still to be made public, however, from our own understanding we suggest that the primary issue concerns the socio-economic decline of the community of Lochboisdale and not the lack of ferry services to and from the Uists. It would appear from the existing timetables that a substantial choice, of sailings to and from the Uists, is available through the three ports (Castlebay - via the Sound of Barra, Lochboisdale and Lochmaddy) that serve the communities of Eriskay, South Uist, Benbecula and North Uist.

Further, we suggest that the problems of Lochboisdale are more related to the physical location of the community in relation to the Western Isles spinal road route and the ever increasing popularity of the recently introduced Sound of Barra service. With the foregoing in mind we question the applicability of a STAG approach to this problem and suggest that an alternative approach, through one of the economic development agencies, would have been more appropriate.

Planned Research (section 30)
The CILT (UK) welcomes the intention of the Scottish Executive to carry out research into services and fares during the first contract period.

We suggest the following issues are subjects that could be included in such research:

- Investigating the viability of the Mull and Islay overland routes.
- Investigating the viability of introducing fast ferries onto the Inner and Outer Isles routes.
- Investigating the viability of retaining a third major vessel in Oban, to enhance services to the Inner and Outer Isles, over the duration of the winter timetable.
- Investigating the viability of introducing a daily scheduled service between the islands of Coll and Tiree with a smaller vessel (across the Gunna Sound) to enable improved use of the major units in the area.
- Investigating the viability of introducing a less prescriptive and more commercial approach to fares on such routes as Largs - Millport, Wemyss Bay - Rothesay. Ardrossan - Brodick and Oban - Craignure (with protection being given to island based residents).

The Draft Service Specification
The latest version of the Draft Service Specification includes a number of changes that have been incorporated into the document as a result of the previous round of consultation held in 2002. The CILT (UK) has considered the draft document and comments as follows:

Schedule 1 - General
Sections 1.3.5 and 1.3.6 refer to the Gourock - Dunoon service and state that the route will be tendered separately from the rest of the routes - known as the single bundle. The subsidy available will be for a passenger only service. The CILT (UK) is concerned that predatory pricing in the tendering exercise for the Gourock - Dunoon service by Western Ferries (who operate a competing passenger and vehicle service) may result in an abuse of a monopoly position which will result in a significant increase in vehicle fares on the McInroys Point to Hunters Quay service.

Schedule 2 - Notices and Instructions
Section 2.2.3 states that the tendering exercise is designed to identify the tenderer requiring the lowest financial compensation. The CILT (UK) comments that the subject of tender (the provision of lifeline services) lends itself to being awarded on a 'best value for money' basis. Section 2.2.25 states that the contract will be for six years. The CILT (UK) suggests that the contract duration is too short to allow tenderers the opportunity to make investment decisions that are anything other than superficial. (CILT (UK) commented in a similar way some time ago, in relation to rail franchises). Section 2.5.36 and Annex 22 describe and set out respectively, material change events that will allow the variation of the terms and conditions between the Scottish Executive and the successful tenderer. The CILT (UK) notes that competition from other operators is not listed and to this end that the financial implications on the successful tenderer could be significant. The CILT (UK) suggests that the Scottish Executive includes competition as constituting material change.

Schedule 3 - Service Specification
Section 3.8.1 states that fares will be adjusted by up to a maximum of CPI (Consumer Price Index) on an annual basis. The CILT (UK) considers that this condition takes no account of costs that are influenced by world events - such as the price of oil and/or the cost of insurance. The implication of adopting this condition will inevitably lead to the successful tenderer having to revert back to the Scottish Executive for an increase in the subsidy.

Schedule 4 - Content of Technical Submission
Section 4.17.2 refers to key staff, but makes no reference to either a Financial Director or a Commercial Director. The CILT (UK) suggests that given the levels of financial reporting required and the need to manage the contract on a commercial basis there is a requirement for the successful operator to employ both senior financial and commercial members of staff.