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The truths they don't want you to read....

Thursday, September 20, 2007

CalMac tendering

So the whole farce has come to an end and after six years work in preparing the tender document, Cal-Mac have been declared the winners in a one horse race. And they are pleased by this!

I have so many problems with this whole process that I barely know where to start.

This whole tendering process was utterly unnecessary, as has been demonstrated on a number of occasions, yet Labour pushed ahead and caused this problem. The SNP allowed it to come to completion thereby giving it further validity and the stamp of approval, which means Cal-Mac will have to go through the entire process again in six years. Which means starting the whole process again, now.

We now have a complex group of companies with some owning the assets (Caledonian Maritime Assets Ltd) and another running the routes (CalMac Ferries Ltd) and we all know just how well this worked when the same trick was pulled on the railways.

In the meantime, if it wasn't in the tender specification it ain't going to happen without huge dollops of cash. So goodbye to any hope of late night ferries from Ullapool, a new Lochboisdale to Mallaig route, or anything that smacks of innovation.

How much has all this palaver cost??? Tens of millions I would guess, which would be enough to pay for a new ferry or to fund RET on some routes. Still, we mustn't let the possibility of improved operation of the ferries delay the creation of another layer of bureaucracy. The consultants must be laughing all the way to the bank, with our money.

Notable by their absence in the Press Releases was any mention of Caledonian MacBrayne Crewing (Guernsey) Limited or Caledonian MacBrayne HR (UK) Limited both of which are additional complications in the whole matter.

The former is especially disgraceful, with all shipborne staff now employed via the Channel Isles
to save National Insurance contributions.

That a publicly controlled company behaves in such a fashion is contemptable - not just at Board level, but also at Government level - and now that the contract has been won, CalMac must be instructed by their sole shareholder (A Salmond) as a matter of public policy to transfer the crew back to a UK employer.


Anonymous said...

ironic really a salmon(d) in charge of a boat that never fishes - is he another polititian just looking after his self - oh sorry you already made that point.

Anonymous said...

Where is your anger directed?

The previous government? They claimed there was no option but to go through the tendering process to meet EC competition demands.

The current government? If they didn't award the contract to CalMac, they'd have had to start the tendering process all over again. Which would have been costly and time-consuming.

CalMac? They submitted their bid - it's not their fault they were the only bidders. Their restructuring was designed to make themselves more financially efficient - surely all those with an understanding of finance would appreciate and support such a move.

What would you have done differently?

Angus said...

Anon 6:04

My ire is directed at all of the above!

What would I have done differently?

I would have followed the advice of Prof Neil Kay who was oft quoted by the SNP until May.

Basically, I would have applied the Altmark decision and scrapped the entire tendering process. Applied the EU rules just like they do in other EU countries and kept CalMac as a public body with the crew employed in the UK.

Funny, that's exactly what the Comhairle wanted and the policy the SNP were standing on until last year....

BTW, the restructuring was not to make themselves 'more financially efficient', it was as another level of management as a direct consequence of the Executive decision to go to tender.

Personally, I'd like to see more money into services and not admin. Anyone disagree?

Anonymous said...

Looks like your view is supported by everyone except ... well, let's just say the past and present Government are blaming each other, and £15m of public money is wasted.

And still no Lochboisdale to Mallaig ferry despite cross-party support.

Anonymous said...

Yes, the restucturing was the result of the tendering process. But there are umpteen different ways to restucture a company.

By choosing to employ staff through the Channel Isles, Cal Mac pay lower NI contributions, which is more financially efficient.

Sure, they are adding less to the UK economy through NI conts, but the amounts involved are not material in macroeconomic terms. And the staff still live / work in the UK, so contribute to the British economy through personal taxation, spending, etc.

The management of Cal Mac have a responsibility to be financially efficient, which is what they appear to be doing.

Did the current Government take the right decision, given the situation they inherited in May? If they hadn't awarded the contract to Cal Mac, who should they have awarded it to? What alternatives were there?

Angus said...

Paying the staff through Guernsey may be more financially efficient, but it leaves the employees without a contribution record unless they make voluntary NI payments. Are you seriously suggesting every public sector body should off-shore to be 'more efficient'?

Of course not, they should be stopped by the Government as a matter of policy.

The current Government should have cancelled the tender process, awarded the contracts to CalMac and then applied the Maritime Cabotage rules exactly as suggested by Prof Neil Kay to protect the communities and CalMac.

Anonymous said...

Prof Neil Kay has another go in The Herald at both Labour and the SNP over the tendering shambles and seems to support your view Angus, rather than Anon who seems to want to excuse the Government.