Chamber and committees

There have beenno studies commissioned by the Scottish Government.

A vital elementof the road equivalent tariff study is for the consultants to engage with keystakeholders as they develop their proposals. Consequently, the studyconsultants have discussed the issues with a number of stakeholders includinglocal tourism agencies.

This is anoperational matter for Scottish Water and its subsidiary. I have asked their Chief Executives to consider the question and write to you directly.

The Scottish Governmenthas had no recent discussions with Caledonian Maritime Assets Limited (CMAL) regarding any difficulties in sourcing new build ferriesin the United Kingdom. CMAL are responsible for procuring vesselsfor use on the Clyde and Hebrides routes and are obliged to follow EU procurementrules when placing orders for new vessels.

The current road equivalenttariff (RET) study will provide an initial analysis of the potential impacts,especially in economic and social terms, of the introduction of the RETapproach. The impact on local business will also be monitored during the pilotphase of the study. The third and final phase of the RET study will involve anevaluation of the pilot, making use of the information gathered through thebaseline and monitoring exercises. In addition to assessing the impact of thepilot, the evaluation will attempt, as far as is possible, to quantify both thecosts and benefits to residents and businesses which would arise should RET beapplied on a permanent basis and rolled out to other ferry routes in the Clyde and Hebrides and Northern Isles networks. Thisevaluation will also consider the likely longer-term impacts of such a rollout.

The consultantsengaged on the road equivalent tariff (RET) study consulted extensively onworldwide experience of RET, as the basis for ferry fares. In considering howRET has been used elsewhere the consultants have taken evidence from both Norway and Canada. An official from the NorwegianGovernment participated in a Scottish Government workshop for key stakeholderson RET in Inverness on 24 October 2007.

In the finalphase of the RET study the consultants will quantify both the costs and benefitswhich would arise should road equivalent tariff be applied on a permanent basisand rolled out to other ferry routes in the Clyde and Hebrides and NorthernIsles networks and the likely longer term impacts of such a roll out.

The budgetallocation for the RET study and pilot in years (a) 2008-09, (b) 2009-10 and(c) 2009-10 is £5 million, £7.5 million and £10 million respectively.

This is one of the issues that the consultants engaged on the road equivalent tariff studyhave been asked to consider and to include in their proposals for the pilotexercise.

There are noplans at present – but we are in regular discussion with Scottish WaterBusiness Stream about the implications of the opening of the retail market fromApril 2008.

Capacity considerationsis one of the issues the consultants engaged on the road equivalent tariff (RET)study have been asked to consider. The study will seek to identify any capacityconstraints that would emerge during the pilot and from any permanent roll out of the RET approach. The consultants have been asked to quantify the cost of increasingthe capacity to meet demand, through additional or larger vessels and new shoreinfrastructure.