Chamber and committees

The Scottish Government has had no such discussions with the UK Government.

I refer the member to the answer to question S4W-12076 on 21 January 2013. All answers to written parliamentary questions are available on the Parliament’s website, the search facility for which can be found at:

http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx.

In the tender for the Northern Isles ferry services contract, bidders were invited to examine the level of freight demand on the Aberdeen-Kirkwall-Lerwick service and set out their proposals to meet that demand. Freight traffic varies at different times of the year so bidders were invited to examine the market and demonstrate that their freight proposals would meet demand.

In their bid, Serco proposed using two freighters during a peak freight season of mid June to 1 December and a single freighter on alternate nights during the low season. Serco reached this position by thoroughly investigating and analysing the freight demands and traffic movements across the year. They were involved in extensive dialogue with the livestock sector, seafood sector and other key shippers of freight and they continue to maintain close links with this sector to ensure that their needs are met. Freight is, of course, also carried on the two ropax vessels all year round. In addition, during the low season, Serco maintain the second freighter ready to be brought into service if ever demand makes this necessary. Bidders’ freight proposals were all fully examined by the tender evaluation panel and an independent expert and they were content with the robustness of Serco’s freight proposals.

The cost of operating the ferry services to the Northern Isles far exceeds revenues so no operator will ever run the services at a profit. This is why these services require to be subsidised by the Scottish Government.

The Northern Isles contract (Volume 1, Section C) includes a tightly defined payments mechanism which guards against any overpayment being made to the operator, Serco. Each year, the operator will only be paid the sum set down in the contract’s financial base case. Payment beyond the agreed base case level will only be made where the operator has recorded savings against predicted costs in certain areas of spend and - even in these instances – any cost savings will be shared with the Scottish Government. The previous 2006-12 contract had been drafted on a different basis with a less complex payments mechanism.

The Northern Isles contract not only provides the necessary incentive to the operator to maximise efficiency but also prevents overpayment to the operator thereby ensuring best value for money for the public purse.

Decisions around the employment of agency workers are operational matters to be made by the companies running our subsidised ferry services.

As a general rule, reference has been made to the Freedom of Information (Scotland) Act 2002 and the exemption under section 33. Guidance on this section describes information as being commercially sensitive when its release might cause “real and actual harm to a relevant commercial, financial or economic interest.

However, Transport Scotland officials are due to have further discussions with Serco with a view to the possible release of some of the redacted material.

This is an operational matter for Serco NorthLink. Since taking over the operation of the Northern Isles ferry services, Serco NorthLink has worked to improve the onboard experience for passengers including the catering on offer. This work is ongoing and is aimed at making the food and drink that is available on the vessels match the needs and expectations of passengers including those on limited budgets. It is therefore anticipated that the food and drink offered on board the Northern Isles vessels will compare favourably which what was previously available to passengers.

In addition, Serco aim to extend their ‘Buy Local Produce’ policy and have pledged that even more local food and beverages will feature on its on-board menus in future. The ‘Buy Local Produce’ policy includes not only Orkney and Shetland. The company’s policy encompasses all of the areas – mainland and islands – from which these lifeline services operate and produce from the Caithness and Grampian areas also feature prominently on the menus.

Under the previous (2006-2012) Northern Isles ferry services contract, details of all passenger and freight service sailings were set out in Part 4 (page 65) of the contract between Scottish Ministers and NorthLink Ferries Ltd. A copy of this contract has been lodged with the Scottish Parliaments Information Centre (SPICe) under Bib No. 54651.

Details of all passenger and freight sailings under the current Northern Isles ferry services contract is available on the NorthLink Ferries website which can be accessed through the following link: http://www.northlinkferries.co.uk/timetables.html.

As I explained in my Parliamentary Statement of 13 December 2012, the dispute on the Northern Isles ferries is rightly a matter to be resolved between the ferry operator, Serco NorthLink, and the RMT union. However, I have on several occasions spoken to both parties and urged them to work constructively together to address their issues and avoid disruption to these vital ferry services. I have also discussed the matter with the STUC. Transport Scotland officials remain in regular contact with Serco to ensure that I remain up-to-date with developments.

I am pleased that the RMT chose not to go through with their full 6-day programme of strike action over the festive period. I remain hopeful that discussion between the ferry operator and the union over the coming days will lead to a final resolution of the dispute, particularly given that Serco have ensured that there are no compulsory redundancies and that they have also given an assurance that they do not intend to make any further changes to staff terms and conditions.

Following a thorough procurement exercise, the closing date for final tenders for the Northern Isles ferry services contract was set for 5 March 2012 and four final bids were received. Over the following weeks these bids were then required to be properly evaluated by a panel of officials and external specialist advisers.

On 4 May 2012, I announced that Serco had emerged as the preferred bidder and the new service came into operation on 5 July 2012.