Chamber and committees

The financial informationrequested is as follows:

Harbour	SE Grant Paid Since 2000 (£ Million)	LA Funding (£ Million)
Dunoon*	4.500	0.565
Kirkwall (Hatston)/Stromness**	17.990	5.314
Aberdeen	0.554***	Nil
Scrabster	20.063	Nil
Lerwick	1.537	Nil

Notes:

*A further £0.135 million was contributedby HITRANS.

**Developments at Hatston and Stromnesswere treated as a single project for grant purposes.

***Costsshown represent payments made to date. Total grant estimated as £2.473 milliononce all project claims have been received.

Those contributionshave enabled harbour authorities to continue to provide relevant berthing facilitiesand it would therefore not be appropriate to regard this as part of subsidies thathave been paid to ferry operators for the provision of lifeline ferry services.These expenditure details have not been notified to the European Commission as aconsequence of its current enquiries into ferry operations in Scotland, or on other occasions. Indeed, we note that the Commission’sdecision Number N503/2005 in respect of the development of the Great Yarmouth OuterHarbour makes it clear that such financial contributions towards maritime infrastructuredoes not constitute State aid.

In response to concernsexpressed by the local community and having regard to the Welfare of Animals (Transport)(Scotland) Regulations 2006, ministers in the previous administration asked NorthLinkFerries Ltd to develop new livestock transport arrangements compliant with all relevantanimal welfare and other regulatory requirements following the inclusion of livestockin the service specification for the Northern Isles ferry service contract thattook effect from 6 July 2006. Ministers also established a livestock shipping workinggroup consisting of representatives from Orkney and Shetland Councils, Orkney andShetland livestock marts, local representatives of the National Farmers’ Union Scotland,Scotbeef, the State Veterinary Service, hauliers and Scottish Executive officialsto support and advise on the company’s efforts. NorthLink has consulted membersof that working group and others in developing designs for new livestock containersand a prototype that was produced last year. Further design and prototype developmentis still underway but NorthLink remains confident that its new arrangements willbe fully in place by autumn 2008.

The proposed containersare being designed for use on NorthLink’s vessels to transport livestock from Orkneyand Shetland as part of the approved services under the contract between Scottishministers and NorthLink Ferries Ltd. The public service contract provides that capitalgrants may be provided to support lifeline ferry operations and it is envisagedthat the new livestock containers will be funded under those provisions, ensuringthat they will be available as necessary to subsequent operators each time the contractis re-tendered.

The purchase of thesecontainers by NorthLink will be subject to an open competition as required underEuropean public procurement rules.

The total cost of the Air Discount Scheme from its launch in May 2006 to April 2007 was £4,962,504.

The public service contract with NorthLink Orkney and Shetland Ferries Ltd was amended in September 2004 to take account of the company’s commercial position and the additional payments that were necessary to maintain essential lifeline ferry operations whilst the contract was re-tendered.That re-tendering was completed in July 2006, with the award of a six-year public service contract in favour of NorthLink Ferries Ltd and that new operator commenced operations on 6 July 2006. As noted by the Auditor General for Scotlandin paragraphs 3.20 to 3.24 of his report into the operation of our contract withNorthLink Orkney and Shetland Ferries Ltd, as available electronically at www.audit-scotland.gov.uk/work,lessons from that experience were reflected in revised tendering arrangements andcontract terms for the contract now in place with NorthLink Ferries Ltd.

I can also confirm that all payments made to NorthLink Ferries Ltd since 6 July 2006 have been made in accordance with the terms of the contract.The company will publish its annual accounts for 2006-07 later this year.

These data are notavailable. The Air Discount Scheme provides for discounted fares for individualscheme members travelling on existing scheduled flights, rather than subsidisingthe flights that they travel on.

No discussions haveyet taken place with HM Treasury or the European Commission regarding possible fundingmechanisms for the replacement Forth Crossing.

However, I can confirmthat preliminary discussions have been held with officials from the Department forTransport about the possibility of securing some European funding.

We do not currentlyhold definitive data on this.

The circumstances relating to the operation of the public service contract with NorthLink Orkney and Shetland Ferries Ltd were fully investigated by the Auditor General for Scotland and his report, as published in December 2005, is availableelectronically at www.audit-scotland.gov.uk/work.

The Air Discount Schemewas approved by the European Commission as Aid of a Social Character. Under Article87(2)(a) of the EC Treaty, such aid can be granted to those resident in a specificregion of need, as long as the relevant air services are open to free competitionamong all community air carriers.

The Air Discount Scheme(ADS) was not subject to a STAG appraisal. Subsidies for existing lifeline ferryservices have not been subject to STAG appraisals. It is standard practice to undertakea STAG appraisal for all new vessels and for any new ferry service proposals.

In developing proposalsfor the ADS, however, consideration was given to an existing body of relevant workincluding detailed cost, benefit and environmental analysis conducted on the Highlands and Islands Strategic Transport Partnership’s proposalfor an expanded network of subsidised air services in the Highlands and Islands.

No tendering processfor the ADS was necessary. The scheme, which provides for discounted air fares formembers travelling on commercial air services, is open to all airlines operatingon eligible routes. The Scottish Executive has, or aims to, put in place tenderedcontracts for the operation of all lifeline ferry services which it subsidises.