Lifeline chaos

[proud_ionian]

ATTEMPTS to put the Northern Isles ferry contract out to tender were thrown into confusion last night after one of the short-listed companies pulled out and the timetable had to be extended for the other contenders.

The Irish Continental Group had been one of three companies invited to bid for the contract to run ferry services to Orkney and Shetland which had been held by NorthLink.

But the Irish group has decided to withdraw its bid, telling Executive ministers it was unhappy with the financial package on offer.

That decision leaves only two companies in the contest - Caledonian MacBrayne (CalMac), the state-owned Western Isles ferry operator and V-Ships, a private ship management company from Glasgow.

πηγη: scotsman

[proud_ionian]

But the competition between these companies has been marred by problems and ministers have now agreed to extend the deadline for tenders by a month because of a perceived shortage of accurate information needed for the bids.

The Northern Isles route has been at the centre of controversy since October 2002, when NorthLink Ferries, a joint venture between CalMac and the Royal Bank of Scotland, secured the five-year contract for the passenger service between Aberdeen and Shetland and Orkney, replacing P&O Ferries.

In April last year, the Scottish Executive was forced to announce plans to retender the contract, more than three years before it expires, because of "financial difficulties".

The company had promised cheaper fares and faster journeys on its three new ferries. But, early in 2004, NorthLink informed the government it would be unable to fulfil the terms of the contract without additional support. The Executive has now ploughed more than £63 million in subsidies into the route to keep the service going - almost double the subsidy originally agreed on.

Now, Irish Continental Group has issued a statement announcing that it had withdrawn from the tender process but without explaining why.

However, sources inside the Irish ferry operator made it clear that the company was unhappy with the level of subsidy on offer and was frustrated at the problems it encountered in getting hold of the necessary information to submit its bid.

No-one was available from V-Ships to comment yesterday but it is understood that they suffered from similar frustrations and were forced to ask ministers to intervene to get the information they needed.

The problem appears to have arisen because of a reluctance on behalf of NorthLink to furnish the two outside bidders, ICG and V-Ships, with details they requested about fuel consumption, seasonal fluctuations and other key issues - information that would be vital to any comprehensive tender bid. As CalMac is a part of the existing, failed, NorthLink service, it is not understood to have encountered the problems faced by ICG and V-Ships.

An Executive spokesman stated that the deadline had been extended by a month "at the request of one of the tenderers as they wished more time" to submit their bid.

The latest problems for the Northern Isles routes represent a particular embarrassment for Tavish Scott, the transport minister, who is also the MSP for Shetland.

Scott yesterday defended the process and said the bid deadline had been extended from 1 November to 1 December to attract bids of the best possible quality.

He said: "This is a complex tendering exercise and it is important that we get it right. In particular, the inclusion of freight and livestock in the contract for the first time - a step that has been very much welcomed by the island communities - has made this exercise more demanding than any predecessor.

"It is in everyone's interest that the bids we receive are thoroughly researched and well-presented. That is why the Executive was willing to allow an extra month for bids to be submitted."

But Fergus Ewing, for the SNP, who has been a consistent critic of the Executive's attempts to put the Western Isles routes out to tender, said these latest problems were symptomatic of the Executive's failure to handle big public service contracts effectively.

He said: "This latest muddle indicates that, yet again, the Scottish Executive appears to be mishandling the procurement of a major public service contract."