Chamber and committees

Western Ferries have expressedconcerns about the tender process for the Clyde and Hebrides ferry services. The Executive has received no formalcomplaints about the administration of the tender process from any of the potentialbidders.

The Executive first became awareof complaints to the European Commission regarding the Clyde and Hebrides ferryservices in spring 2005 but were not informed who lodged the complaints nor thedetails of the complaints. The general policy of the European Commission, unlessin exceptional circumstances, is not to reveal the identities of any complainants.In this instance, the Commission has not revealed the names of complainants, ordetails of any complaints, against the Clyde and Hebrides ferry services.

Arran Ferries wrote to the Executiveon 26 April 2006 (which the Executive received on 9 May after requestinga copy), indicating that they had lodged a detailed report with the European Commissionrequesting the immediate commencement of Infraction Proceedings.

The tender process for the Clydeand Hebrides ferry services commenced in October last year when adverts seekingexpressions of interest from operators interested in providing the services werewidely published. Following the responses to the adverts, Pre-Qualification Questionnaireswere sent to the organisations that expressed an interest. By the closing date forreturns, three organisations submitted a Pre-Qualification Questionnaire. The questionnaires,which are being used to assess the financial and operational robustness of the organisationsinterested in operating the services, are currently being evaluated by the Executive.Following this process, which we hope to complete shortly, we will identify a suitabletender list and issue formal Invitations to Tender.

The Executive is committed toproviding bidders for the Clyde and Hebrides ferry services with as much information as possible toallow them to construct a fully informed bid. As part of the tender process so far,an Initial Information Pack was sent to the organisations who expressed an interestin operating the services. The Initial Information Pack provided background informationon the project and details of the existing network of services.

For the next stage of the procurementprocess, the Executive will be establishing an Electronic Information Room. Accessto the Electronic Information Room will be made available to all of the organisationswho are invited to tender to operate the services. The Electronic Information Roomwill include detailed operational and financial information relating to the routesbeing tendered, and should allow bidders to construct a fully informed bid.

As with any competitive tenderingcompetition, it is a commercial decision for potential bidders to consider the scaleof costs they are willing to commit to the tender process for the Clyde and Hebrides ferryservices.

Following Western Ferries’decision to withdraw from the Clyde and Hebrides ferry services tender process,none of the other organisations who remain in the tender process have indicatedto the Executive that they wish to withdraw from the competition at this stage. The Executive intends to contact these organisations shortly once the currentphase of the tendering process has been completed.

The Executive has recently introduced electronictendering arrangements for procurement exercises such as this and bidders for theClyde and Hebrides ferry services have the option of submitting their bidand other associated information using this mechanism. These arrangements shouldreduce bidders printing and postage costs, as well as provide savings on staff costsgiven the less intensive nature of the arrangements.

In addition, the Executive willalso be establishing an Electronic Information Room as part of the next stage of the tender process. Access to the Electronic Information Room will be made availableto all of the organisations who are invited to tender to operate the services. Theinformation provided by the Executive will include detailed operational and financialinformation relating to the existing services. This should minimise the time thatbidders need to spend on collating and researching information in preparation oftheir bid.

The Clyde and Hebrides ferryservices are being tendered in line with Scottish Executive and EU procurementrules and in a fully transparent and fair manner. Therefore the Executive hasno intention of re-examining its tendering procedures in light of Western Ferries’decision to withdraw from the tender competition.

It is a regulatoryrequirement of EU funding that activities must be additional. Moreover, structuralfunds only provide a share of support for projects with the balance made up bymatch-funding. Consequently, any decisions on the future development ofprojects would be the responsibility of their match-funders.

I refer the Member to myletter to all MSPs of 11 May 2006. A copy of the letter is available at http://www.scottish.parliament.uk/nmCentre/news/news-06/pa06-046.htm.

Although no final decisionshave yet been taken by the Executive on how future Structural Funds should bedelivered in Scotland, a range of different delivery models are currentlybeing considered. Due to the fact that future Structural Funds will be greatlyreduced in future providing added value will be a key criterion in developingany new system. One option being considered is the use of a co-financing model,used widely in other parts of the EU, where blocks of funding are allocated toindividual organisations to deliver key priorities. Under any system allorganisations used for delivering structural funds would be required todemonstrate clearly how funds would be used to complement activities currentlyundertaken by them and to ensure the additional value of the funds ismaintained. This would be monitored closely by the Executive, as the managing authority,and the programme monitoring committees of future programmes, which will be comprisedof key Structural Funds partners.