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The Story of Subsidy and Competition in Scotland's West Coast Shipping Services
Born in 1933, Andrew Wilson, the author of the 1975-published "Sound of Silence", in which he described the bizarre situation which had developed after Western Ferries brought competition to the Islay and Jura routes, these hitherto the preserve of MacBrayne's and their successors and author of its sequel, "The Sound of The Clam", describing the even more bizarre events which had followed the publication of his earlier booklet, events which to his mind posed many questions about the conduct of government, its use of funds, its judgement, its accuracy and its secrecy, had joined Harrisons (Clyde) Ltd. in 1973, they the Glasgow shipowners who amongst other things acted as managers for Western Ferries and Wilson then apoointed Western Ferries' Managing Director. Educated in the USA and England, Andrew Wilson had finally taken a degree in Modern History at Oxford in 1954 and then served for three years in The Royal Navy and then with the RNR, reaching the rank of Lieutenant Commander. Joining the firm of J. Walter Thompson Co. (London) in 1957, he had worked on marketing and general policy matters with major manufacturers of consumer goods and with nationalised services (aircraft and tourism) and, in 1967, had become a director of the company, he too completing his P.M.D. Studies at Harvard Business School that same year, his declared hobby, 'clearing dead wood' ! 1
Here, as in the good old days when we would go the cinema and find our seats after the start of the film, watch the screen and the plot, which we often wouldn't then immediately understand, watch the film's end and then, after watching some adverts, a newsreel, a 'Look At Life' documentary and a "B" feature film, we would settle down to watch the beginning of the main film that we'd gone to see and then discover that 'we'd only missed the opening credits and the film was only just beginning when we'd taken our seats', here, we are going to join Andrew Wilson's story 'almost in the middle' and then cover its beginning and its end ! So, let's 'dive in' to the shallow and somewhat murky waters of the past, into the West Loch of Tarbert in 1975 ! It is difficult to be sure who had the idea but it was probably David Boyd in Islay. He had noticed from the figures given in "The Sound of Silence" that the subsidy which Caledonian MacBrayne required for the Islay route just about equalled Western Ferries' total route income. Given the same subsidy, Western Ferries would not need to charge at all, assuming of course that the stampede of passengers to (and from) the island did not sink the ship. It was easy to demonstrate the principle of the thing. Western Ferries would provide the ship free. An oil company could be asked to give free fuel. The crew offered their services free. 'Sound Catering', a staff venture, agreed to serve free food. And the island distillers kindly contributed free whisky, Bowmore, Mackinlay's, Red Hackle, Findlater's and Long John, all of which contain a healthy portion of Islay malt. The first difficulty in such an exercise, like marriage, is to decide upon a day. Some days are wrong because they are too early or too late to be featured in the Sunday newspapers. Weekends are unpopular with short staffed television teams. If you choose the best day, you meet the hottest competition from national events since even rapists and quintuplets seem to know when their appearances are likely to have the greatest effect. How can one win when each day brings news of convulsion and catastrophe ? In short, there is no good day for a special event and, whatever day is chosen, you are bound to announce the event too early, so that the press are tired of it by the time it happens: or too late, so that they don't even know it occurred. So the date chosen was Friday, June 13th, 1975. How to control the numbers ? Islay prides itself for the whisky it produces. Tarbert men, on the mainland side, pride themselves on consuming it. And free whisky is accounted to have a special flavour and mellowness lacking in all other kinds., a special booking systems for passengers had to be established ! The rest should have been straightforward. All that was needed were lapel badges for the press, folders containing background material, and a quick press conference once the trip was well and truly on its way. It was known from the beginning that many whom we would have liked to come would be unable to accept the invitation, officials who might feel threatened when called upon to explain their decisions, others who might be expected to stand by The Secretary of State on principle, yet others who were otherwise engaged. But it was disappointing that many press people who had hoped to come, did not, whether from fear of missed copy dates, seasickness or a surfeit of whisky (less likely), it is hard to say. Invitees who did come somehow became lost in the surging throng but fortunately managed to pass the barrier of staff counting the numbers coming on board. [It is a heinous sin to exceed your passenger certificate. It is said that a Mate, observing a Department of Trade surveyor coming on board, remarked to his Captain "I'm glad he sees us 2
on a busy day, we have nearly a thousand on board". The ship had a certificate for just 600 ! Fortunately for the Captain, the Surveyor could not see the wood for the trees]. Most did not have lapel badges and therefore had to be identified by guesswork. And their folders, except for containing a photograph of our rival vessel, the Pioneer, (travelling as it happens empty) carried none of the other papers which they were supposed to contain. If public relations were supposed to be Western Ferries' strong point, the company was now revealed as bungling amateurs. Press conferences (or news conferences as they are popularly known now that television has become such an important medium) are normally identified with multiple microphones and flashing camera bulbs. Not so this one. Wedged into the bridge in order to hear each other shout, everybody agreed that only the insanity of The Secretary of State's determination to ignore the fact that Western Ferries had introduced new methods, helped to build island prosperity, kept prices down, won most of the traffic and not gone bankrupt in the process could excuse such total absurdity as this trip. It was easy to pose 'twenty questions' for The Secretary of State in the sure knowledge that he would not answer any of them. One of the nicest things about Argyll was its Member of Parliament, Iain MacCormick. The popular picture of a SNP member as a be-kilted warrior wielding oil statistics and dire threats does not fit him. He cares about all those living in his constituency as if even the deer had votes. He lent his weight to the demand for proper investigation of the situation. After this, the conference lost any cohesion it ever had. The poor journalists, local and national, were besieged by well-wishers such as local businessmen, customers, farmers and agents anxious to press home the importance of the Western Ferries' service to the people of Islay and Jura. At Port Askaig a fresh deputation from Jura awaited the ship waving banners in the damp air and Lilly MacDougall played the pipes as if to summon the clans from all the Western Highlands. It is time to refer to the description of the scene in 'The Herald' Diary which, despite small errors of fact, recollected the scene with amazing clarity. 'If we don't get this show off the road' said one of the captains (there seemed to be at least half a dozen), Lilly'll run out of wind'. No chance. No way. There were stories too. 'MacBrayne bashing' said one of the captains. 'Oh, no, but I did batter the Loch Carron with this boat last week ... ' And he added, 'But maybe that was carrying things a bit far'. Or the tale of Sir William Lithgow, constant user of Western Ferries to get to Jura. 'He once missed the boat by minutes and stood waving on the pier. I just waved back', said the captain. And of course there was the catering. 'Sound Catering' did it and sound indeed it was. The bar that day, run by a seemingly inexhaustible chief engineer, operated from the ship's 'Mother's Room'. 'This room', read the notice, 'is provided for mothers who wish to attend their babies'. It definitely wasn't 'Mother's Ruin' for the mothers' room. It was Bowmore malt. And they gave away 1300 bottles of that and other notable whiskies.
Finally there was the Reverend Archie Lamont, Church of Scotland minister in Tarbert and vociferous champion of the Kennacraig/Port Askaig link. It was he who dreamed up the signal that floated from the mast of the Sound of Jura as she set off. What was it ? 'The Herald' Diary asked. 'Ecclesiastes Chapter 9 verse 11, 'The race is not to the swift nor the battle to the strong'. But from our rival sailing up the loch, the message was hidden because, significantly, the ship was enveloped in mist. The passengers did not seem to notice. Perhaps it was just as well that the party from Canadian television didn't appear after all. Or perhaps it did and we never knew ! That then is the story told in Western Ferries' managing director Andrew Wilson's "Sound of Silence" published on April 30th 1975, the booklet pointing out that the Government, by providing an additional blanket subsidy for Caledonian MacBrayne of £2½ million was doing a grave disservice to Caledonian MacBrayne, the remote communities served by the nationalised shipping concerns and unsubsidised transport undertakings in the area such as private hauliers and Western Ferries and we now continue with Andrew Wilson's account of ' The Story of Subsidy and Competition in Scotland's West Coast Shipping Services' extracted from his 1975-published booklets, the "Sound of Silence" and "The Sound of The Clam" . . . . . The Story So Far The "Sound of Silence" was successful in one unexpected way; it prompted all sorts of people to recollect bye-gone days, one reader recalling the remarkable message received by Western Ferries in the early days when its ship, the "Sound of Islay was suspected to have suffered damage to one of her propellers. It read, "We have inspected both propellers and they are in good order, the starboard one has three blades, the port one four" ! Another reader, a knowledgeable enthusiast commenting that Western Ferries should not overrate their originality in introducing a service with the "Sound of Islay" to Port Askaig in 1968, a service from West Loch Tarbert was first introduced in 1826, fifty years before MacBrayne's became involved. The ship was called "Maid of Islay" and she sailed to Port Askaig too. The same reader also pointing out that the first "Pioneer", built by MacBrayne's in 1905 with specially light draught for the route, was not withdrawn until 1944. She had a service speed of 12 knots and much greater passenger capacity but only two more of a crew than her 1974 diesel powered, roll-on, roll-off, namesake. Not all the comments were encouraging. The Managing Director of a debt collecting agency claimed to have read the book and wrote to suggest that, since Western Ferries were now "in trouble", the company would have to call upon their services. A stiff reply was returned by The Post Office, the (self-same) debt collectors had promptly gone bankrupt themselves ! It was inevitable that such the "Sound of Silence", published in haste, would contain many errors and it was anticipated that those in the know would be quick to point out the mistakes. This was to under-estimate the power of decision makers to remain aloof. They bought the book, which was helpful. They may have read it. But, they did not dispute any of the facts which it contained. 4
The silence, for those awaiting the heavy hand of censure, was deafening. In fact, in addition to three typographical errors, the book was guilty of a howler, for it drastically underestimated the extent of the Government's support for Caledonian MacBrayne. The booklet had referred to The Scottish Transport Group's capital debt of £20 million at a remarkably low interest rate of 3%. Since the Treasury are borrowing at current interest rates, this meant that the taxpayer was, in effect, giving a concealed subsidy. The booklet had mentioned subsidy of about £730,000, which was recoverable through the agreement with The Secretary of State for Scotland under the terms of The Highlands and Islands Shipping Services Act 1960 and the booklet had mentioned, of course, the £2½ million top up announced in April 1975. Though the extent to which The Scottish Transport Group's shipping companies benefited from this loan can not be established with any exactitude, the loan enabled the Group as a whole to operate within the limits of its own cash resources and much of the then available £20 million was devoted to the shipping side of STG's activities. The net book value of ships alone at the end of 1974 was £9.3 million. Western Ferries Birth and Development In the mid-1960's, the islands on the West Coast of Scotland were served basically by two methods of transport; mail services operated by David MacBrayne Ltd., which was 50% Government owned and "puffers" or small bulk cargo vessels capable of landing at simple piers or on the beach to discharge coal, lime etc. MacBrayne's also operated a number of cargo vessels out of Glasgow. None of these vessels were equiped to deal with road transport, the three car ferries owned by MacBrayne's at the time, the Columba, Clansman and Hebrides, were all side loading and not suited to dealing with the sharply increasing growth in tourist traffic or commercial vehicles. The Norwegians are innovators, the Norwegian land and sea transport systems are very tightly and efficiently controlled by central and local government, although private companies participate. The planning involved is a model, see "Instillning av 15 December 1963 fra Ferjeutralget i Møre og Romsdal", as is also the annual reporting which is detailed and includes forecasts. They had decided to treat shipping as an extension of the road system and the simple and inexpensive network which they set up had transformed the pattern of communication and life in an area geographically similar to the West Coast of Scotland. The Norwegians had assisted interested parties in Scotland such as The Highlands and Islands Development Board and Zetland County Council who evolved a plan in 1964 for inter-island ferries in Shetland which, with financial aid for central Government, became operational nine years later. Interested residents in Islay and Jura also started to discuss how shipping services might be improved. With the help of The Highlands and Islands Development Board, Mr Oppegaard was commissioned to examine the "overland route", a proposal to service Jura and thence Islay from the nearest roadhead on the mainland (see Highland Transport Services, HMSO 1967) 5
but, it needed somebody to demonstrate that new systems were physically possible on the West Coast. In 1966 three people engaged in contracting work on the West Coast, John Rose (ex-mariner), Gavin Hamilton and Christopher Pollok, decided to set up Eileann Sea Services and, with the help of an HIDB loan, the Isle of Gigha was constructed and started operation in the middle of the 1966 seamen's strike but, in November 1966 the ship capsized and this put the company in financial difficulty. If anything further were to happen, more money and technical back-up were needed. A group of Scottish businessmen having special interest in shipping and haulage matters, many of whom also had local interests in Islay and Jura, subscribed £100,000 capital and Western Ferries was set up with John Rose as manager.
The Sound of Islay was ordered from Ferguson Brothers of Port Glasgow, she designed to carry 20 cars or a combination of cars and commercial vehicles. She was launched amid a storm of derision and began sailing between Kennacraig, in West Loch Tarbert and Islay on April 7th 1968, in command of her was Captain Angus Mitchell, her Chief Officer Sandy Ferguson. The service provided a new facility, roll-on, roll-off and not only operated twice as frequently as the existing boat to Islay but too offered lower rates without the benefit of any subsidy. Unlike its competitor it operated seven days a week, at night if need be and punctually. It was immediately successful not only in taking the traffic which had formerly used mail or cargo services but also in converting much of the bulk trade which had formerly travelled in 'puffers' to using trailers, thus saving on time, handling, breakage, pilferage and port dues. Also lower rates meant a general increase in trade and the volume was such that a larger and 6
faster vessel, Sound of Jura, had to be ordered from Norway and the capital of the company was proportionately increased to £250,000.
She came into operation in 1969 with three sailings a day, leaving Kennacraig at 06.00, 11.00 and 16.00 and the excursion fare for two days or a weekend for any length of car was just £5.00 return. Western Ferries had already formed a very close working relationship with a local haulier James Mundell. He opened depots near both ferry terminals so that trailers could be moved on and off the vessels quickly without drivers and tractor units having to cross with them. He provided a parcels service as well as bulk service and, by means of pure personal dedication, grass roots expertise and low rates he built a thriving business. His relationship with Western Ferries was always on strictly commercial lines, he never became a shareholder and he exacted as much discount as he could get but also cooperated in every way he could to keep the independent service alive.
At the beginning of 1969 the Port Askaig (Islay) to Feolin (Jura) service began, a high frequency service across a short stretch of water with a landing craft type vessel, the 1966built Isle of Gigha, now modified and renamed Sound of Gigha, she sometimes affectionately known as 'The Mousetrap' and capable of carrying the largest commercial vehicle then permitted on the island roads or carrying up to six cars. This effectively joined Islay and Jura and increased the traffic to the mainland. Jura was now served by three through sailings a day instead of three per week and both islands could now enjoy things which had hitherto been luxuries like fresh fruit and uncracked washand basins The Sound of Gigha did seven runs a day on week days, plus Sunday sailings and the single car fare between Islay and Jura in 1969 was 90 pence for any length of car and 15 pence single for an adult 7
Western Ferries habit of naming ships after geographical straights is infinitely confusing to the newcomer since they all appear to be operating off station. Setting up ferry operations requires the cooperation of a wide variety of government agencies e.g. The Department of Trade (as it is now entitled) on ship design before grant of passenger certificates, county councils for planning consents, piers and roads. The Company received every possible assistance from The Department of Trade, but it would be idle to pretend that the same was generally true of Argyll County Council. In 1970, the Sound of Islay commenced the Campbeltown (Scotland) to Red Bay (Northern Ireland) service and was successful with the initial help of a cement strike in Ireland and a dock strike in England but attempts to keep up a winter service, primarily with timber, were unsuccessful. The ship continued to operate the summer service until 1973 and spent the winter in charter work all up and down the West Coast carrying every conceivable kind of freight provided it was legal. And she acted as relief vessel to Islay when the Sound of Jura was going into dock for annual survey. Meanwhile, under The 1968 Transport Act, a new Government undertaking, Tthe Scottish Transport Group, acquired all of David MacBrayne Ltd. and The Caledonian Steam Packet Co. Ltd. from British Rail and thus acquired a virtual monopoly of ferry services on the West Coast with the exception of Islay and Jura, where Western Ferries had become the major carrier. Negotiations then began in 1971 with The Scottish Office for Western Ferries to become sole operators to Islay with its neighbouring small islands of Jura, Gigha and Colonsay. In September 1971 Caledonian MacBrayne announced that they would withdraw their service in these islands as from April, 1972 but, at the last moment, in February 1972, a public inquiry was held by The Scottish Transport Users' Consultative Committee in Islay and as a result of its recommendations On August 15th The Scottish Transport Group made a formal offer of £2 per share for Western Ferries' capital. This was later increased to £2.25 but in November an alternative solution put forward by The Dornoch Shipping Company was finally adopted. Some major shareholders sold out and others, including the General Accident insurance company and various distillery users, came in and Western Ferries was reconstructed to prepare the way for investment by wider island interests. The Scottish Transport Group then announced that they would continue their Islay service on a "commercial basis" without subsidy. Group Chairman Colonel Thomas, now Sir Patrick Thomas, added, "the service might not make a profit this coming year but it almost certainly will the next". And so, in order to convert their ship, the 1954-built, side-loading, car ferry Arran into a 'roll-on, roll-off' ferry, Caledonian MacBrayne Ltd. gave one month's notice of their withdrawal from the Islay and Jura routes at the end of 1974.
They returned to the Islay route nearly four months later but discontinued servicing Jura. Gigha too was for a long time without any regular cargo service. It is still serviced by Western Ferries occasionally. During this period Western Ferries' vessels kept services operating to Islay and Jura and were assured that a) they would receive proper subsidy from the local authority for the Jura route under Section 34 of the Transport Act 1968. This was agreed over a year and a half later and b) that negotiations for the public acquisition of terminals would be given priority. (Nothing useful has been achieved (1975) and the Council pier at Port Askaig is now in a dilapidated state). In May 1973, Western Ferries opened a new route across the Clyde between McInroy's Point (Gourock) and Hunter's Quay (Dunoon) using two modified double-ended Swedish car ferries, the Sound of Scarba, ex-Olandsund III and the Sound of Shuna, ex-Olandsund IV, plus, in mid-1974, an ex-British Rail Isle of Wight car ferry, the Sound of Sanda, ex-Lymington, a very interesting vessel, Clyde-built by Denny's of Dumbarton in 1938 and almost certainly the first passenger ship and car ferry to be fitted, as are many of today's CalMac ferries, with Voith-Schneider propulsion units. The service was much shorter than the parallel Caledonian MacBrayne service, simpler for all kinds of vehicle which had only to drive on one end of the ferry and off the other and rates would have been lower than Caledonian MacBrayne's had they not reduced their rates on this route just before the Western Ferries service commenced. The service is regular, frequent and operates late hours if the traffic warrants. While Caledonian MacBrayne expressed surprise at the duplication of services, traffics have developed so considerably as to keep both services very active indeed. In July 1974 Western Ferries brought Sound of Islay to the Clyde to commence a regular service between McInroy's Point (Gourock) and Sir Robert McAlpine's platform site at Ardyne Point, near Toward Lighthouse and opposite Rothesay. The trebling of oil prices following on the Arab/Israeli war in the autumn of 1973 plus inflation generally led to an application by Caledonian Macbrayne Ltd. for a rate increase on all ferry routes and this was eventually held back by the Government to 25% as of May 1974. A further application for an increase of 25% as of October 1974 was approved by The Prices Commission, but held back by the Government pending a complete survey of shipping services on the West Coast. Western Ferries were not consulted in this survey but felt obliged to write to The Economic Planning Department of The Secretary of State for Scotland on February 13th 1975 to state that if further assistance was granted to The Scottish Transport Group to enable them to continue operating an uneconomic service to Islay, Western Ferries might well have to withdraw. The letter was acknowledged and the offer to discuss the situation was ignored ! At the beginning of April, Caledonian MacBrayne were deeply involved in delicate union negotiations with a strong threat of strike action. On Tuesday April 16th, which happened to be the day after Mr Healey's Budget Speech emphasizing control of public spending, The Secretary of State for Scotland announced that he was granting £2½ million immediately to Caledonian MacBrayne Ltd. as a revenue subsidy without strings. Price increases are to be held back to 25% on cars and passengers and 5% on commercial freight. No announcement was made about the repayments of the Government loan due under the Transport Act 1968 to begin in January 1976 or about future policy in general. 9
Western Ferries have written to ask if The Secretary of State would give Western Ferries a subsidy for its Islay service equivalent to the subsidy granted to Caledonian MacBrayne for their Islay service. No answer has been received at the time of going to press (1975) but in view of The Secretary of State's past pronouncements it is doubtful if he will be prepared to back two services. At this moment (1975), Western Ferries is in a healthier state than it has ever been and is actively engaged in promoting oil related services in the Clyde area. These now account for about 40% of total turnover. It could no doubt find alternative and profitable employment for Sound of Jura but this is not what the Company was set up to do. In summary therefore, Western Ferries have fought subsidised competition, coped with the absence of competition and succeeded in retaining the bulk of the traffic even when the competition introduced a larger, newer, faster (and less economic) vessel. It has been wooed by government who wished it at one time to take over the total responsibility for the service and it has been bid for by the nationalised operator. Now it would be necessary to compete with the larger vessel, direct subsidies for the larger vessel, inhibition of price increases to counteract inflation, extra taxes on whisky thus depressing production in Islay (Customs and Excise receipts on Islay and Jura whiskies are worth at least £12 million per annum and exports £6 million) and unwillingness of government even to discuss the situation. Taken together it might be too much. The company announced on April 17th, 1975 that it would be obliged to make a decision at the end of May whether to continue to operate its Islay service after September 30th, 1975. The Islay route illustrates the fact that there is no one "best" solution in matters of shipping but rather a large number of alternatives. The successful operator is the one who makes up the best package. Caledonian MacBrayne Limited and its forebears have always sailed from the point furthest up West Loch Tarbert. Tarbert signifies in Gaelic "tar" (across) and "ber" (bring), i.e. the isthmus where boats were carried across, in this case to and from Loch Fyne. Western Ferries chose a point four miles down the loch towards Islay. This had two advantages. The sea passage was shortened and there was more water for a larger and deeper vessel to berth, ship stability, capacity and running economy tend to improve with deeper draught. On the Isle of Islay, Western Ferries chose Port Askaig, which was both closer than Port Ellen and also more sheltered. It was also slightly more convenient to internal road communications in the island. For this reason Western Ferries have often been able to make the passage when the weather was too bad for Caledonian MacBrayne to attempt the passage to Port Ellen which is, in any event, surrounded by rocky shoals. These basic decisions allowed Western Ferries to achieve a four hour round trip with a 13 - 14 knot vessel. Later the service was operated as a 4½ hour round trip to save fuel. Caledonian MacBrayne were obliged to install double the power in their new vessel, the Pioneer, in order to achieve the same turn round times, since each knot gained over 14 knots requires massive extra power and double the power means virtually doubled consumption of fuel oil. 10
Let us first compare in some detail the Western Ferries vessel Sound of Jura and its Caledonian MacBrayne competitor, the Pioneer, launched by the wife of The Secretary of State for Scotland in 1974. Sound of Jura Builders Hatlø Verksted Norway Acceptance 1969 Length O.A. 162 feet Breadth 37 feet Draught 8 feet Deadweight 216½ tons Speed 13½ knots Vehicle Capacity 36 cars or 7/8 trailers and 5 cars Passengers 250 Crew 6 Loading Bow and stern Leith 1974 221 feet 45 feet 7.9 feet 245 tons 16 knots 30 cars or 6 trailers and 9 cars 273 21 Stern and crane Pioneer RobbCaledon
In summary, Pioneer is a larger vessel except in draught, in retrospect Sound of Jura would be a better ship if deeper still, but this seemed a risk at the time. Pioneer's size together with her speed means that she can create considerable wash and erosion in West Loch Tarbert, but it does not mean that she can carry more traffic. In practice she has deck space for less, particularly as the ramp is relatively narrow and the deck area is not sheltered from salt spray. Pioneer has got stabilisers which can make her more comfortable in bad seas on the Port Ellen crossing but, the passenger accommodation is commonly rated less comfortable. The real difference lies in price. The Sound of Jura cost £315,000, the Pioneer, it is believed, £1 million. Inflation is part explanation, but extra tonnage, engine power, cranes and stabilisers mean that the vessel is inherently more expensive. The Pioneer is also more expensive to run. The listed crew of 21 does not include relief staff etc. who, together, bring seagoing staff up to about 30. By comparison, Western Ferries employs just three crews of six plus three reliefs or 21 staff in total. In terms of income Western Ferries have always been the more successful despite the inherent advantages possessed by the competition, national booking facilities, direct control of some traffic through MacBrayne haulage and bus and coach interests, ability to penalise customers holding national discounts if they diverted traffic on this route. (These practices together with denying Western Ferries the use of piers even when Grant aided and tactical price reductions to deter competition are sometimes regarded as "unfair" but this has always been accepted by Western Ferries who use share issues to consolidate customer loyalty, a policy denied to MacBrayne. At this stage it would be tidy if one could draw a direct trading account comparison between the two companies on the Islay route, but Caledonian MacBrayne do not publish route costings, nor can they be required to do so. They can claim immunity even from questions in 11
Parliament on this score and, in order to indicate the kind of costs involved in the two services, one is required to estimate figures for Caledonian MacBrayne. These estimates are based on operating experience, traffic surveys etc but the only true way of establishing the facts is for Caledonian MacBrayne to publish a route costing. Thus the following comparison must be taken as indicating orders of magnitude only, their loss may be much greater. ROUTE COSTING : West Loch Tarbert/Islay - Year Ending September 30th, 1975 Western Ferries MacBrayne Forecast £000 £000 Gross Income (Card rates) Discount Net Income Crew Wages Fuel & Oil Docking/repairs Insurance Stores, etc. Shore expenses (Rent, rates, repairs, transport) = 301 30 271 85 48 30 9 7 8 187 = 84 10 100 3 = Net contribution after depreciation Interest on capital at 8% Net contribution after interest Remarks Notes 1 2 3 It is doubtful if Caledonian MacBrayne get 37% of the traffic. Assuming MacBrayne Haulage pay normal discounts. Reduced schedule in winter for Pioneer. 36 48 16 = 32 = 88 (290) = 113 (202) 246 76 15 15 18 157
Caledonian "Guestimated" 175 125
Contribution to overheads before depreciation (89) Depreciation on Terminals 10 Depreciation on Ships Depreciation on Main Vessel Depreciation on Relief (1/12)
It can now be seen that there is a very considerable difference in the performance of the two companies on the Islay route. If both companies are to be maintained then it would seem reasonable to subsidise both on the basis of the traffic they succeed in attracting, rather than merely subsidising losses which can be the result of inefficiency. Alternatively with good will it should be possible to work out a 12
more economical joint scheme for the future, now that the whole nation is being forced to draw in its belt. For instance : (a) (b) (c) (d) Using Sound of Jura as the main vessel. Operating from Kennacraig Terminal only on the mainland. Doing two trips a day to Port Askaig (morning and evening) and one trip to Port Ellen. Using Arran or, less probably, Pioneer as relief vessel at handsome day charter rates.
If such schemes were adopted and the Islay service received a subsidy such as is propsed of, say, £200,000, it should be possible to reduce rates to the island. In an appendix to his first booklet "The Sound of Silence", Andrew Wilson gives some notes on 'Accounting Practices', the remarks of continuing interest today - "The average layman can be excused for believing that an accountant simply adds up the figures at the end of the year and says what profit the company has made. But in fact the accountant is required to give mathematical precision to several items which are, by their nature, imprecise. "For instance, Should any value be put on goodwill and trademarks ? If so what ? Should stocks be valued at cost, or at selling price, or in some other way ? Should materials be valued at historic or current prices ? How should costs be allocated between different operations ? Should assets such as machinery etc. which wears out in due course be written down over five years or eight years and so much per year or more in the first year ? Or should an extra amount be deducted from profit to allow for the fact that the machine, when replaced, will cost a lot more due to inflation ? "There are no hard and fast answers to these questions, but accountants have adopted various conventions. The conventions are designed to achieve accuracy, consistency and comparability, not absolute "truth". In fact, when looking at business affairs in any depth it is often necessary to compile accounts in different ways, to photograph the business from different angles so to speak. "For instance, it may be wise to look at market valuation without regard to original cost since this might reveal that, contrary to traditional accountancy practice, ships, like other property can appreciate in value over a period of years despite the fact that they are technically wearing out. The businessman has to use judgement and not be the slave of any one accountancy convention. "For this reason, the traditional horror of "producing two sets of books" is misplaced. Most companies produce at least two sets of books in the figurative sense, typed statements or computer print outs. "The tax 'book' is special because the government has its own rules as to what it will accept by way of depreciation of assets as a deduction from taxable profits. "The company often chooses to look at its own affairs in a different way. Moreover it is becoming common practice to present the company's accounts in two parallel ways, with and without allowance for inflation. "Thus the presentation of a company's financial affairs should be made in different ways. But this should be done to elucidate the situation and not to confuse it.
"Those looking at the data should be aware of the alternative presentations possible, just as the taxman is aware that the company's taxable profit is often different from the profit reported to shareholders, it is seldom greater" ! The islanders had wanted Western Ferries to stay (in 1975) and for a long time it had been the intention of Western Ferries management to attract more shareholders in the areas which it served. For the company to promote the sale of shares it would be necessary to issue a prospectus and such a document would, by the terms of The Companies Act, have to give financial forecasts etc. Nobody in his right mind would be so rash and the project lay idle from 1972. But, the islanders wanted to buy shares. All of them could not do so because a private company is limited to fifty members but, they could form an association to take subscriptions which could then, subject to certain conditions, be invested in Western Ferries' shares and this is exactly what they did. The story is told of the barmaid who was asked if she would like to buy a share in Western Ferries at £2.25, her reply was, "Would I have to pay that every year ?" The reply illustrates the problems for people who have never owned a share in their life. But the committee were not deterred. They advertised and solicited and cajoled 670 people into buying nearly 1500 shares. Elsewhere, in his "Sound of Silence", Andrew Wilson notes that 'boredom is a factor in ferry operations' and tells us that, in his then two years of running Western Ferries, the company has tried to cope with drunks walking off piers, a baby born on board, nearly losing a Rolls Royce in The Clyde, seamen threatening to disembowel one of the ferries' masters, the persistent theft of whistles from the ships' lifejackets, one of the dockyards leaving a child's kilt in the lubrication system of one ferry's main engines, a one day strike, a seamen so honest as to resign when offered a bribe by the public and a bull with a broken leg, the list endless for such is the nature of a ferry service ! In the event, on September 30, 1981, six years after Andrew Wilson's booklets were published, Western Ferries suspended their Islay service and their last ship on the run, their original 1968-built Sound of Islay, was sold to The Government of Newfoundland where she continues in service to this day. In a 'companion volume' volume to Andrew Wilson's booklets, "The Sound of Sense", sometime now Ardrishaig engineer Arthur Blue, who describes himself as a "Portonian of West Highland extraction, now migrated back to scene of ancestral misdeeds", usefully compares Norwegian and Scottish West Coast ferry practices. Marine engineer Arthur Blue, whose asserted hobby is 'messing about in boots', served his apprenticeship in Kincaid's of Greenock, served in The Royal Marines and 'The Reserve', as a corporal, of which he notes, the "same ominous rank as Napoleon, Hitler and Harry Secombe" and worked for ten years with The Bergen Shipping Company - He lived for some time in Denmark, speaks Norwegian with Bergen-Danish accent, which often led Norwegian listeners to believe that he was a Finn, Faroese, or other exotic citizen and began working as a Chief Engineer with Western Ferries in 1972. His booklet, "The Sound of Sense - A Study of Ferry and Coastal Shipping in Norway", was 'an edited version of a talk given to members of The Coastal Cruising Association in Glasgow on November 15, 1975' and, in his introduction, he records that "Just after 1850 the Storting (Parliament) passed a Bill authorising publicly funded road building and a comprehensive system of mail contracts was set up. Soon afterwards the first tentative steamboats appeared on the fjords (many of them supplied from places like Dumbarton) and the resulting regularity of service soon led to the wide expansion of steamer services around the coast . . . . . Bergen, at the start and for several years forward, had no berths for steamers, which were all loaded 14
and discharged by boats at a time when the Clyde not only had a multitude of berths, but such modernities as traffic segregation systems. "Towards the closing years of the nineteenth century emigration and rural depopulation had become a very serious threat to the nation's survival and to counter this the famous Coastal Express, the "Hurtigruten", service was set up linking Bergen with all the main ports up to the Russian frontier and providing for the first time regular and reliable winter communication with the far North. "The Hurtigruten has always required substantial State support and, although it has since become justly famed as a tourist attraction, it should be remembered that its fundamental raison d'être is much more serious. "On what, even in summer, can be a frightening coast, where the ships' pilots are required to memorise about 4,000 navigational marks, the Hurtigruten's steamers run through midwinter blizzards 'with the undramatic regularity of tramcars', ensuring that the housewives of Kirkenes receive the latest miracle soap powder simultaneously being offered to their sisters twelve hundred miles to the south". Ending his booklet with a summary of his talk, Arthur Blue notes the following points a) Norway has always been heavily dependent on sea transport. They have been therefore stimulated to make the best possible use of it. b) They set up their first subsidised service, the Hurtigruten, in the last century. Developments since have received wide bi-partisan support in Parliament and among the population. c) Since the early 1960's, the companies and the Government have worked on the fundamental analysis of rollon/roll-off operations, the standardisation of ferry vessels' methods of operation to minimise route costs and standardised route costings. d) This has meant that about thirty-seven different operators can enter into contract with Government to supply passenger services, without a great confusion of special treatment for each individual case. e) Losses on each route (including return on capital) are made up by subsidy provided that the company does not exceed standard costs of operation. The figures for each route are published. f) Fares are standardised by route length at the 'Road Equivalent' level. g) These fares are relatively low, and this encourages economic activity in remote areas. h) An attempt is made, not altogether successfully, to standardise the service provided on different routes, depending on the population served etc. i) All ferry terminals are publicly owned (as part of the roads) and are open free to operators of scheduled services. Facilities, linkspans and the like are largely standardised, though, it is added, the administration of other harbours, though, is still somewhat muddled between the Dept. of Fisheries, local authorities and private bodies. j) It is implicit in this system that the Government accept the necessity for positive support for communities dependent on sea transport, and do not believe that such communities are on a par with those whose 15
communications depend on roads alone, or that remote communities should suffer the full penalty of distance from the main populated areas. In Scotland, Governments, relying heavily on The Gaskin Report, have taken a different view. k) The combined levels of support, ferry subsidies, transport subsidies and terminal grants, is high but because economic activity is stimulated and because costs are carefully controlled, the subsidy per unit carried is much lower in Norway than in Scotland. 1) The system is capable of adapting itself to change e.g. replacing conventional cargo/passenger vessels with high speed vessels, although change is never problem free. m) The system has not hampered the development of independent shipping services which still handle about 60% of all internal cargo transport free of subsidy. n) An attempt is being made to standardise costs for all methods of transport, road, rail, ship and air, including capital consumption costs, so as to make sure that subsidies are not duplicated. This is an extension of the principle of road equivalent pricing. o) It is intended that the system should be developed further in terms of i. Standard subsidies per seat/kilometre ii. Devolution of control to Regional level. p) Natural conditions in Norway are not radically different from those on the West Coast of Scotland and such differences that do exist are not all in the Norwegians favour. Many of their policies could be employed with benefit here. If memory now serves the writer here correctly, it may be of interest to some to recall that when, in the autumn of 1965, the old and beautiful, 1931-built Clyde paddle steamer "Jeanie Deans" was sold to Don Rose's Coastal Steam Packet Company for just £11,500, the chief engineer, engaged to take her south to The Thames, was rushed to hospital in an ambulance with stomach pains on the very day of her departure from Greenock's Deep Water Berth and an engineer at Lamont's yard was hastily drafted in to paddler's second engineer in the seeming mysteries of her engine room, that 'Lamont's engineer', to the best of the present writer's understanding, was Arthur Blue, later the author of "The Sound of Sense" and, under his guidance, the old "Jeanie Deans" sailed from Greenock late that afternoon, the date, November 5th, 1966, 'Guy Fawkes' Night' ! Previously, on the Wednesday, under the command of Captain Stanley Woods, who had been in charge of the former 'Red Funnel' paddle steamer "Princess Elizabeth" at Weymouth that season and, with a pilot aboard, as well as new owner Don Rose, clutching a plate of smoked salmon sandwiches, the "Jeanie Deans" had backed out of Lamont's into the Clyde and proceeded down river for trials. She was still capable of a good turn of speed and easily overtook one of the Gourock to Dunoon ferries but, there were lots of things that were not quite right and when the whistle wire was pulled to give a cheery blast it came away in Stanley Woods hand. When the fire hydrants were tested, not only did the hose pipes leak but so did some of the steel pipes feeding them. The list of defects was long. 16
"Jeanie Deans" at Greenock's Deep Water Berth before departing on November 5, 1965 Speeding along in the gathering darkness the paddle beat got slower and slower and slower and, not far off Dunoon, a message was sent up from the engine room that the boiler water feed pump was not working and the boiler was nearly out of water ! Taking her out of the main shipping channel, the Clyde pilot had her drop anchor off Inverkip, where was even once, until the late 1820's, a regular steamer call and now today, the Kip Marina monopolises the river mouth, it accommodating some 600 yachts. The writer here, who had earlier witnessed the preparations aboard the "Jeanie Deans" in Greenock that afternoon and couldn't but avoid noting her, saloon windows all lit up, lying rather curiously off Inverkip at around 5.30 pm that night. As everybody familiar with the Clyde Steamers of that time knew, the "Jeanie Deans" was 'always short of water', a fact that her new owner should have been aware of when planning her delivery trip south AND, as her new owner would later discover to his cost and ultimate loss, the "Jeanie Deans" should also have had her paddle wheels completely replaced before anything else ! After an hour or so, while her crew watched the modest, 'Scottish', Guy Fawkes fireworks displays on each bank of the Clyde and the engineers fixed the problem, the ship weighed anchor, all going seemingly well until off Pladda, when again the paddle beat got slower and slower, forcing another stop for more remedial work. One of those on board remembers Captain Woods, looking rather anxiously at the chart and commenting on how deep the water was even close up to the shore in places and wondering if there was anywhere near enough chain in the locker to drop the anchor. Fortunately the engineers got things going again and, around midnight, the ship anchored off Stranraer to await daylight and then go in to drop off the 'Lamont's engineer' and pick up more water. Needless really to say of 1965, VHF for inter-ship and port radio simply didn't exist and, although sea-going paddlers like the "Jeanie Deans" were equipped with medium frequency 17
radios, their regular use was much discouraged as the broadcast range was so large that the whole system would have clogged up if too many people had used it too often. Thus the staff at Stranraer were therefore much surprised to find the "Jeanie Deans" steaming up to their jetty unannounced early on the Saturday morning, this too undoubtedly her first call there since before WWII, she originally designed by Fairfield Shipyard's designer Percy Hillhouse for long 'down Firth' day excursions to Stranraer etc.. A figure promptly emerged to direct the paddler away from the western side of the pier, where the mail boat berthed and to moor on the on the eastern side - That duly done, the same figure appeared and, for the very first time, asked what the paddler wanted, 'Water, lots of water' ! But, there was no hydrant on the east side and the ship had to back off and come in again on the west berth, the very one that she had just vacated, for that was where the only water hydrant was ! Once alongside the hydrant, the crew began busying themselves and filling every available receptacle with spare boiler feed water for the onward voyage, "just in case" and the 'receptacles' even included the four ship's lifeboats which, being rather dry, were initially passing it straight out again through their clinker built boards ! It has to be assumed that 'Lamont's engineer', Arthur Blue, most likely came up with the idea of filling the ship's lifeboats with extra water and that he, presumably after carefully explaining everything again and finally handing over to the ship's new replacement engineer, was more than relieved to return homewards after his 'epic voyage'. Sometime later, the "Jeanie Deans" continued on her passage to The Medway where she arrived on Sunday 14th November to lay up for the winter on the buoys off the Gun Wharf, at Chatham, not far from Thunderbolt Pier, which is now the sailing berth for The Paddle Steamer Preservation Society's ex-Dart River paddle steamer, the "Kingswear Castle". Sadly, the "Jeanie Deans" career as a Thames excursion steamer, sailing under the new name of "Queen of The South", was a complete diaster, due in no small measure to her boiler water problems and the failure to give her completely new paddle wheels, money being somewhat mis-spent even on giving her a bow rudder in the winter of 1966/67. If anything could go wrong with this venture as well as a lot that you couldn't possibly imagine would, it did go wrong and the ship sailed on only a handful of days in 1966 and 1967 as she staggered from one breakdown to the next and, after being arrested by an Admiralty Marshall for non-payment of debts, the ship was towed away in December 1967 to be scrapped in Antwerp leaving much unhappiness and many broken dreams in her wake. Here we return to Western Ferries' "Sound of Jura", she sold to The Mexican Government in September 1976 and, after an overhaul in the Ailsa Shipbuilding Company's yard at Troon, sailing for her new home as the "Quintana Roo", Quintana Roo itself is Mexico's easternmost state, lying on the Yucatán Peninsula, the Mexican Government's newly acquired car ferry to open up the route between Puerto Morelos, historically the area's main port and the island of Cozumel. Writing barely a year before this event, Western Ferries' Managing Director, in Chapter II of "The Sound of The Clam", notes that seven of the twelve vessels which operated to Islay during the period 1826 - 1905 were to finish life as total wrecks, little at the time could he have dreamed that a similar fate was to befall the "Sound of Jura".
Here the "Quintana Roo", the former Western Ferries' "Sound of Islay" swept ashore on the beach at Puerto Morelos after the area was hit by Hurricane Wilma on October 19, 2005 Hurricane Wilma was the most intense hurricane ever recorded in The Atlantic Basin, the twenty-second storm (including a subtropical storm discovered in reanalysis), the thirteenth hurricane, the sixth major hurricane and the fourth 'Category 5' hurricane of the recordbreaking 2005 hurricane season - the record for most 'Category 5' storms in a single season previously held by the 1933 season. Wilma made several landfalls, with the most destructive effects felt in The Yucatán Peninsula of Mexico, Cuba and the US state of Florida. At least 63 deaths were reported and damage was estimated at over $29.1 billion US dollars, Hurricane Wilma among the top five costliest hurricanes ever recorded in The Atlantic and the fourth costliest storm in U.S. history.
On the other side of the coin, Western Ferries' 1968-built "Sound of Islay" sails on, still under her original name, for the Government of Newfoundland.
Of particular interest to readers of this document, is the fact that they can access and download, in PDF format, a copy of The Competition Commission's Report, published on February 23, 1983, which, in Chapter 7, "Competition", covers the topics of Western Ferries' services to Islay AND from Hunter's Quay to McInroy's Point. The 238-page long report, Caledonian MacBrayne Ltd - A Report on Shipping Services Provided by The Company, which cost £9.25 p in 1983, can be found at http://www.competitioncommission.org.uk/rep_pub/reports/1983/162caledonian_macbrayne_ltd.htm Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Appendices Caledonian MacBrayne Ltd 13 pages Financial Framework and Objectives 30 pages Efficiency in The Use of Manpower 16 pages Efficiency of Operations 27 pages Investment 8 pages Fares and Costs 17 pages Competition 21 pages Quality of Service 8 pages Management and Control 9 pages Conclusions 23 pages 56 pages
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