Calmac is here to Stay

A little over a year ago BBC reported about an EU inquiry into the state subsidised ferry company Caledonian MacBrayne. The article mentioned the fact that the European Commission is investigating the subsidy that is received by Calmac to operate it's routes in the west of Scotland. Other ferry companies such as Western Ferries and Pentland Ferries don't receive this subsidy and claim that they are squeezed out by Calmac. These companies however operate on the more profitable routes and leave, more or less forced by their state owned opponent, the loss-making so called lifeline routes to Calmac.

Second artist impression of the new Islay Ferry - image courtesy Caledonian Maritime Assets Ltd

Withdrawing subsidy from Calmac could not only harm the company itself but could very well result in a (much) lower service level on certain difficult and unprofitable routes. On the other hand, subsidizing a company doesn't trigger them to lower their operating costs and (try to) start making a profit. A difficult situation and the outcome of this EU inquiry could in the end lead to the break-up of Calmac, something that was propagated by Professor Baird of Napier University and Islay's own Lord George Robertson of Port Ellen. Yesterday however BBC reported that EU approved of the ferry subsidy which means that Calmac and the lifeline ferry routes are safe. A quote from the article: Continue reading.....

Concerns that the government's funding of Scotland's lifeline ferry services breached European competition law have been rejected by an official inquiry. Services in the Clyde, Hebridean and Northern Isles are provided mainly by state-owned Caledonian MacBrayne and Northlink. The European Commission said this was "compatible with state-aid rules". Scotland's main private ferry companies, Western Ferries and Pentland Ferries, have expressed serious concern of being squeezed out by CalMac. But CalMac has argued that opening up individual routes to competition could result in private operators "cherry picking" the most profitable ones and pose a substantial threat to the future of "lifeline" services, which need subsidy to survive. The operator has insisted that maintaining the current situation where the Clyde and Hebridean routes are offered as a package of 24, with the exception of Gourock-Dunoon, best served island communities and the taxpayer.

I think overall most people will have peace with this outcome although I have my serious doubts about the last sentence where is said that "maintaining the current situation where the routes are offered as a package of 24 best served island communities and the taxpayer." The tender, that was put out in 2007 to attract other ferry companies to bid on these 24 routes, mainly to lower operating costs and increase service, failed completely when Calmac was the sole bidder in the end when V-Ships pulled out. Leaving the routes as a package of 24 seems to be the best survival strategy for state owned Calmac, unless another major player will start to stir up things when these routes are put out to tender again in the near future, who knows? For now though Calmac will continue to bring us to and from our favourite Scottish islands and we will keep on enjoying it!

Tag: calmac ferry travel

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