Transport, Infrastructure and Climate Change Committee Chairman’s Opening Remarks Good afternoon, thank you for inviting

us to give evidence to your inquiry. I’m Peter Timms, non-executive chairman of the David MacBrayne group of companies since 2006, having previously been a non-executive director of Caledonian MacBrayne since 2000, and of both NorthLink companies originally since 2002. I have lived on the Isle of Bute for the last 27 years.

[On my right/left is Bill Davidson, Chief Executive of NorthLink since its start, and on my left/right is Lawrie Sinclair, Managing Director of CalMac since 2000.]

The committee has heard and taken considerable evidence to date, and has previously received documentation from ourselves, so I shall confine my remarks to just 3 topics.

Firstly, although CMAL now have the responsibility for the Clyde and Hebrides ships, piers and terminals, we still have most of the staff and all of the experience of looking after and operating the services. Clearly the shortest distance between an island and the mainland, together with the fastest vessel, offers the shortest journey time, greatest frequency, and most capacity: indeed we are offered these views by many. However they ignore the cost of implementing such an upheaval in terms of the 30 year plus service life of the existing fleet, together with the present ports and mainland infrastructures. [These views also seem to ignore the running costs of faster vessels because fuel consumption over water increases exponentially with speed.]

We operate all year round in some of the most severe weather in Europe, and our vessels are designed for this and custom built mostly with shallow drafts and narrow beams to fit the limited access at many of the ports we serve. Of course we do not sail when conditions are so bad that they are unsafe, yet many passengers expect us to operate whatever the weather. It has been suggested that instead of replacing vessels with like for like, we should be innovative and replace one large monohull with two smaller and faster catamarans.

Well we have commissioned an independent study of the advantages and disadvantages of operating a catamaran compared with a conventional ferry on the Uig–Lochmaddy–Tarbert routes. This report may be available before the committee reaches its conclusions and we would be happy to provide you with a summary of the outcome.

The whole of the west coast UK ferry industry is hugely interested to see how the Pentalina operates in bad weather when it is due to come into service on the Pentland Firth later this summer. It is rarely noted that we already operate a small catamaran between Gourock and Dunoon, and all our experience and that of some Irish Sea operators is that a monohull will continue to run in bad weather when a catamaran has long been tied up due to MCA wave height restrictions.

Secondly, both NorthLink and CalMac engage with and consult communities, hauliers, and ferry users, and will continue to do so. Both companies and the then Scottish Executive undertook significant consultation to take account of community views before publishing the detailed tender specifications.

Speaking personally, I regret that the Shipping Services Advisory Committees have been discontinued as they gave us and our customers a formal opportunity twice a year in which to discuss collectively the very issues you have heard some complaints about. Now we engage directly with each community separately, and in some cases with more than one group within the same community with differing views: in the last 12 months some of our Directors or Managers have visited virtually every one of our destinations, and have formally and informally met and consulted with community representatives and business sectors.

At this point perhaps I should point out some of the differences between the companies: CalMac operates some 30 ships on 24 routes while NorthLink operates 5 on 3 routes. We operate some 350 services a day in the West, but just 10 a day to the Northern Isles. Each year about 5 million passengers use the Clyde and Hebrides services: while NorthLink carries little more than three hundred thousand. CalMac’s vessel turnround times between sailings are generally short, sometimes 20 minutes to disembark up to thousand passengers and embark another thousand, which makes flexibility difficult: in contrast, NorthLink’s are long, making flexibility much easier.

Additionally both provide some services in summer which operate at or near vessel capacity yet in winter may have to sail with a handful of passengers.

You have heard evidence about the competing needs of different sections of communities, the perishable nature of island produce, contrasted with the wishes of the retail trade for fresh product delivered early; in some cases the limited opportunity for visitors and residents

to spend time at opposite ends of the same route; in others, the need to cater for sporting interests and other socio-economic needs.

With such a wide variety of user needs and volumes, we appreciate that we are not going to be able to please everyone all of the time, but we are certainly trying to. In addition we are much more proactive with our customers today: by innovative marketing including award-winning website activity and TV advertising (there will be a CalMac advert at half time in the UEFA Cup Final), by setting new, higher standards for our publications, by helping to market some destinations to fill a gap not serviced by communities or local businesses, by the use of independent surveys to monitor service quality and to "arbitrate" on local issues (for example on Bute and Mull). with significant support for community and cultural events, by our commitment to the National Plan for Gaelic, with much closer relationships with other public bodies like the National Trust, Historic Scotland, VisitScotland, and Highlands & Islands Enterprise. NorthLink’s Customer Care programmes benefited from the ‘new company’ ethos from the very start, but it is taking a while longer in CalMac, where attitudes developed over decades have been overcome. I would be the first to agree that we can still improve further, and there is evidence to support the view that our performance is often better than portrayed. You have heard it said that CalMac has a take it or leave it attitude, is unhelpful, won’t listen, or that it operates to the benefit of its crews rather than customers. Yet often this view is the result of our inability to meet the service improvement or ticket price demands of some: this may be due to hours of work restrictions, vessel or port unavailability, or simply affordability. Thirdly and finally, the Public Service Contracts we have are prescriptive: they specify the vessels to use on which route, the precise timetables to operate, and the prices to charge. They include a performance regime which requires services to arrive within a specified time, and there are heavy financial penalties for service failures, although a number of relief events are specified. For example to provide for matters outside our control, or to wait for delayed public transport, or to wait for essential lifeline produce.

We are expected, and are keen, to innovate whenever possible. However in order to adjust any aspect of our services we must initially consult with interested parties in the community involved to procure their broad agreement, then seek the approval of Scottish Ministers to vary the contract: this is relatively straightforward if there are no extra costs, but much more complex when additional costs will be incurred, particularly in view of the recent Spending Review.

We understand the wish of communities for more frequent or earlier or later sailings, or for other service improvements, and we acknowledge that the cost of ferry travel represents a barrier to economic welfare. However, ultimately these are matters of policy for the Scottish Government. We have discussed fares reviews with previous administrations, but were told that the level of grant could not change. With that restriction, any fare reductions would also have been accompanied by corresponding fares increases somewhere else: understandably Ministers were not keen to proceed.

In that context the RET study is to be welcomed, however its impact on demand and capacity will not be clear until it has been in operation for some years.

I hope you find my remarks helpful, thank you.

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