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CalMac insists its three-way split will be plain sailing for everyone

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Published Date: 21 September 2006
THE ferry company Caledonian MacBrayne has assured staff and customers its services will not be affected by a restructuring that will result in the state-owned group being split into three.
The firm has been forced to divide itself to comply with European rules ahead of a tendering process for Clyde and Hebridean routes.

From 1 October, an operating company, CalMac Ferries, based at the present headquarters in Gourock, will be established to cover the 400 pier and support staff. A separate company will be set up on the same day and it will own the 31 vessels. Its name and HQ have yet to be confirmed.

Earlier this year, Caledonian MacBrayne Crewing (Guernsey) was set up in the Channel Islands and employs the company's 800 sea-going staff.

The transfer of crew to an offshore company, first proposed last year, will save an estimated £1.5 million a year by exploiting a loophole that allows it to avoid paying National Insurance contributions to the government.

CalMac, which received a subsidy of £26 million from the Scottish Executive last year, said the move puts it in line with other shipping companies that already use the loophole - effective only for mariners - and allows it to compete better with private operators.

The restructuring is necessary to comply with legal requirements relating to CalMac's routes going out to tender. That exercise recently began with an invitation to tender for the Gourock-Dunoon service, and other routes will follow soon.

Laurie Sinclair, CalMac's managing director, said: "To enable the existing Caledonian MacBrayne business to participate in that tender process, it is a requirement that there be a clear legal separation between, on the one hand, the company that owns the vessels and ports, and, on the other hand, the company that actually operates the ferry services.

"At the present time, Caledonian MacBrayne Ltd both owns the vessels and the ports and runs the ferry service."

He went on: "The transfer will have no impact upon employees' terms and conditions, and continuity of service as far as our customers are concerned. Apart from the change of company, it will be business as usual."

Phil Preston, CalMac's operations director, said: "This move follows a restructure earlier this year when seafaring staff transferred to an off-shore crewing company.

"The entire restructuring process has been planned to provide a seamless transition and to ensure continuity of service to all CalMac's customers."

An Executive spokesman said: "This will have no implications for the terms and conditions of staff and will have no impact on the services delivered to customers."

CalMac has been waiting seven years for the tendering process. In December, MSPs defeated the Executive on the issue and tried to block the exercise. But the European Commission warned ministers they had to go ahead or risk having to pay back million of pounds in subsidies.

Bids for the 26 routes are due over the next few weeks and new operators will run the services from autumn next year.

Ten companies originally expressed an interest in running the Clyde and Hebrides services, but only one - V Ships - is still in the running.

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  • Last Updated: 20 September 2006 11:16 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Caledonian MacBrayne
 
1

conspiracy,

21/09/2006 00:49:52

i find this a disgrace and blatant theft.
they get subsidy from scottish exec of 26million then move shop to guernsey, and yet the scottish exec dont ask for the subsidy back.its obviously another case of its not our money so what,but its our money ie the tax payers that they have blatantly wasted, wonder who,s getting the back hander here. its about time people in power were made to admit there mis-management of public funds. and be held responsible for there actions, but no this wont happen either, will it.

2

Pete39,

Tasmania 21/09/2006 05:20:14

Sign of the times Harry. Does this mean that those 800 sailors no longer qualify for the dole or the pension, I hope they get a massive increase in pay.
Its not all bad, when you think of all the Quangos in Scotland producing not a lot for quite a bundle, then it is a natural instinct to move them offshore to India and cut the costs by about 75%

3

Guga,

Rockall 21/09/2006 05:40:12

That is a blatant lie. They do not have to split the company to comply with European rules. They say they have been told that by the EC. This is just the government stuffing things up even further for the islanders, and opening the door to privatisation.

As it is, MacBrayne's are the dearest ferries in Europe, if not the world. The company is owned by the Scottish Executive, i.e. the Scottish people, but the people get little benefit. It is little wonder that the economies of the outer islands, in particular, are going down the tubes. Nobody can afford to use the ferries. There is very little employment, and little chance of any companies moving to the islands because of the high freight rates.

They will not introduce Road Equivalent Tariffs (RET) on MacBraynes as they say the EC won't allow it. Another lie.

The population of the Western Isles is continuing to decrease, and what is left is a rapidly aging population. We are all going to go the same way of St. Kilda before too long.

Our MSP is not worth a tinker's curse, and the Labour Party are selling the islands out. And when they get round to privatising MacBraynes, we will be well and truly stuffed.

Incidentally, air fares are no better. For those of you who haven't experienced it, the standard return fare from Stornoway to Glasgow is over £320. You can get a return air fare from Glasgow to Los Angeles for around that price. What are the government doing about that? Ask our MSP, he will tell you. The answer is bugger all!

4

Gordon,

Edinburgh 21/09/2006 06:25:23

If CalMac split the company further, then they could claim subsidies on only those routes where they make losses. The Gourock - Dunoon should not be involved in any bidding war as individually it can make a profit.

The subsidies currently paid to CalMac will be peanuts compared with what will have to be shelled out once several companies each want a share and need a head office,staffing, etc.

Globalisation of companies improves efficiency - look at the latest range of mergers in the burgeoning financial sector - but the reverse is being forced on essential services, making them more top-heavy and less efficient.

26million this year, 50+ by the time this round of tendering is complete - and probably either a worse service or higher user costs too.

5

William of Liberton,

21/09/2006 06:48:21

I think it is a pity more Scottish companies could not exploit this loophole to save on National Insurance contributions which all go to the Westminster Treasury. It helps balance up (unfortunately only to a very small degree) the oil revenues which flow out of Scotland in the same direction. And what about the refusal of DWP to pay attendance allowance to elderly persons in receipt of free personal care in Scotland? The loss of these National Insurance contributions helps balance that up too (although again only to a very small extent).

6

paulr,

21/09/2006 07:28:33

A state owned company avoiding paying the state national insurance? seems about right, while at the same time taking 26million in public money as subsidy. Perfectly logical that......wonder who get the backhanders?

7

,

21/09/2006 07:32:06
Comment Removed By Administrator
Reason:
8

Dave,

Western Isles 21/09/2006 07:51:43

Calmac are a bit like British Airways, you'd simply never even consider using them - Archie

My sentiments exactly but unforutnately we have no other choice because the airlines out of the western isles are BA owned too. We're held to ransom by these fat cats.

By the way, a cleaner on the MV isle of lewis gets a princely £18k a year for a 2 week on 2 week off with hore, I mean, shore leave and they don't work Sun day's for obvious reasons!

9

Billy,

Germany 21/09/2006 08:14:57

Liars, Liars,Liars... they do not have to break their company up. EU directives are non-binding when
a country chooses to ignore them. France Germany Italy etc would never dream of implementing a directive they don't like... the whole thing is a con .

I suspect there is big money to be made here ,how much has this company , or it's directors " loaned
to the labour party".?

10

freetalkscotland,

21/09/2006 08:44:13

Some interesting, if ill-informed comments here.

However, what's good for the Exec, should be good for the private sector too. Let's just export every company to cheaper parts.


Debate this further at http://www.forumspring.com/freetalkscotlan/viewtopic.php?...

11

Dave,

Western Isles 21/09/2006 08:56:25

TLJ

Which are ill informed? Please discuss your comment here......

12

Steven P,

Barra 21/09/2006 08:56:49

I can understand mariners who work in deep sea trade having a NI avoidance loophole. But how can domestic ferry crews who sleep in their own beds overnight qualify? How are they any different from train drivers working Glasgow to Wemyss Bay to meet the ferry!

13

Steven P,

Balamory 21/09/2006 09:01:25

So the maths seem to be -
current subsidy 26 million
less NI saving 1.5 million
new subsidy 24.5 million

or put another way
new subsidy 24.5 million
plus loss of NI contribs 1.5 million
net subsidy 26 million

its the same amount!!
i hate to think how many management consultants and accountants were hired to pull off that one.

14

The west awake,

Argyll 21/09/2006 09:42:57

The lunatics are running the asylum.
A state-owned, state-funded enterprise is employing clever accountance procedures TO AVOID PAYING TAX TO THE UK TREASURY???
What a fantastic message to be sending out!
That the Executive are capable of this Glasgow City Council type manuevering comes as no surprise, given that the Executive basically is one big Labour Council, but can anyone explain Labours obsession with CalMac, to the point of blatently cooking the books to ensure they retain the Dunoon-Gourock line.
Incidentally, this article is inaccurate, the only 2 tenderers are CalMac and Western Ferries, V Ships pulled out saying the tendering process was written so heavily in favour of CalMac they reckoned they couldn't win.

15

Gregb,

edinburgh 21/09/2006 09:45:57

Another expensive waste of time. We should bring in more efficient companies like Western Ferries who know how to run a ferry service.

16

SouthernSkye,

Isle of Skye 21/09/2006 11:13:16

The BBC have it reported differently. The split is a money saving exercise to, 'they say', make CalMac more competative. Nothing to do with being "forced to" by the EU !
This story is, at least partly, baloney!!
And yes, V-Ships pulled out. It was reported in the Scotsman. A quick search of their own archives could have helped remove one glaring error from the report. I found it...Here is the URL
http://news.scotsman.com/scotland.cfm?id=1332932006

Here is the BBC details:
http://news.bbc.co.uk/2/hi/uk_news/scotland/5362062.stm
text

State-owned ferry operator Caledonian MacBrayne is to be split into three new companies from October.
One of the companies is registered in Guernsey in the Channel Isles, resulting in substantial tax savings.

The bulk of administrative staff will remain based at Gourock in Inverclyde, while ownership of the ferries will be transferred to a third company.

The RMT union said it had been reassured by guarantees that staff pay and conditions would not be affected.

CalMac management said this could help it to become more competitive during the tendering process for its own routes.

The winner of the first tender, for the Gourock to Dunoon route, is expected to be announced at the end of October.

CalMac and Western Ferries have both tendered for the contract.

17

Mora,

21/09/2006 15:16:40

legends shouldn't be disbanded, they should be well managed and given accounting credibility for community service, employment and training, environmental best practice and other public benefits; profit is not the primary purpose; rather it is the transport service offered to the isles subsidised by resource rich centres of population; the EU rules have obviously been given careful consideration but how many other EU countries have to provide services to scattered island communities? Surely there are arguments for divergance from the one-size-fits-all EU regulations on competition?

18

Donnie,

Edinburgh 21/09/2006 15:56:40

Having been brought up on the west coast and remember the days of getting a ferry service three times a week, I think the Cal Macs service now is outstanding and long may it continue. Its a pity that we have not seen the same improvement of service in the rail and bus networks.

Western Ferries claim that they could do a better job, but maybe thay should start by offering their customers some toilet facilities, and waiting rooms for their foot passengers. At least Calmac have toilets!!

19

conspiracy,

edinburgh 21/09/2006 17:46:26

but still no one will admit liablility or apoligies to the taxpayers,or even admit wasting of resources and funds.


 

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