I fully endorse your leader (September 21) condemning the "ferry tendering fiasco" for the CalMac network. As you commented, I submitted a proposal to the transport committee of parliament and the then Scottish Executive in 2005 based on the then recent Altmark case. That proposal would have enabled the executive to comply with EC maritime and state aid rules without having to undergo the costly exercise of tendering CalMac. Two other colleagues also submitted arguments which came to a similar conclusion as mine.
The then Transport Minister, Nicol Stephen, told the transport committee in March 2005 that the three of us would be given an opportunity to discuss our alternatives with the executive. That never happened. Instead, just before the parliamentary debate on tendering CalMac, the executive published a series of briefing notes to MSPs. In my case, it started by saying "the Altmark criteria are not applicable to (such) ferry services", a comment which, if believed, would have the immediate effect of discrediting my Altmark-based proposal, and indeed making me look incompetent.
My two academic colleagues were given similar treatment and our analyses were trashed by the executive in unfair and inaccurate ways. We had been given no warning this was to happen, we were not consulted and we had no time to rebut the spurious and fallacious arguments by the executive before the vote was taken.
Later in October 2006, Alyn Smith MEP received a reply from the EC Transport Commissioner confirming that not only were the Altmark principles relevant to such ferry services, they had to be complied with under EC law. But, of course, by then it was too late, the vote in parliament had resulted in the decision to tender CalMac services.
So the whole fiasco is worse than seems at first sight. It is true the process has been a costly shambles, but parliament also made a decision on the basis of seriously flawed information. Any academic or outside expert who had seen how our reputations were put at risk by the previous executive would think twice before giving evidence to parliament or the new Scottish Government. Further, the same officials who made these decisions are still the same officials advising the new government.
My last point is a serious marker regarding the future. If you are going to tender under EC rules, the executive chose the worst possible method here.
As I pointed out to the last executive, EC law and guidelines provide safeguards for authorities to help prevent cherrypicking in the case of lifeline ferry services. The executive ignored such safeguards and the result is that, while CalMac will face severe operational obligations and constraints given the terms of its contract, potential cherrypickers face no such constraints. They will not target the network as a whole, or even individual routes, they will target vehicle-oriented, freight-only, short crossing and/or tourist season segments of routes, resulting in lifeline ferry services being taken over by unregulated commercial operators, and the unprofitable foot passenger, integrated public transport, year-round rump left for CalMac and the taxpayer to pick up.
Professor Neil Kay, Economics Department, University of Strathclyde.
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