26 June 2008

S3M-2014 Rosyth to Zeebrugge Ferry Service

Scottish Parliament

Thursday 26 June 2008

[THE PRESIDING OFFICER opened the meeting at 09:00]
... ... ...
Rosyth to Zeebrugge Ferry Service

The Deputy Presiding Officer (Trish Godman): The next item of business is a members' business debate on motion S3M-2014, in the name of John Park, on the Rosyth to Zeebrugge ferry service.

Motion debated,

That the Parliament is deeply disappointed to learn of Superfast Ferries' decision to end sailings from Rosyth to Zeebrugge from September 2008; recognises that the ferry link to Europe is vital to the Fife and Scottish economies; notes that the service has been a commercial success regularly operating at full capacity; is disappointed that Superfast does not plan to continue with sailings until an alternative operator is found, and hopes that an alternative operator can be found for this crucial ferry route.

... ... ...

The Minister for Transport, Infrastructure and Climate Change (Stewart Stevenson): I commend John Park for his efforts in bringing the debate to Parliament and for the phrasing of his motion, which has enabled the widest possible support on a multi-party basis. It is a model of what a members' business debate can usefully do. In particular, I pick out of the motion the words that sum up the way that we all feel—"deeply disappointed". The disappointment is not just John Park's; it is shared by us all, including me.

In the time that is available, I will attempt to address a range of issues that have been raised in the debate. Before I do so, however, I extend a general invitation. I am happy to meet members—preferably collectively, as that is the most effective way of doing things—to discuss in confidence some of the matters that it would not be appropriate to put in the Official Report of the Parliament, so that we can maintain, from here forward, the clear and useful consensus that has been expressed in the debate. I hope that members feel that that is useful.

We first became aware in January of some issues associated with the service, although at that stage its withdrawal was not on the agenda. We had a couple of meetings with the local management; the first at their behest, the second at my behest. Matters then moved on, and we became aware in April of the plans to close the service. I went with Alan Burns of Forth Ports to visit the owners of the ferry company in Athens. I regret to say that it was the only time that I have been to Greece and I did not leave the airport. I hope to enjoy my next visit there rather more than I enjoyed that visit. We were heard courteously and with good grace, but we did not like what we heard in return.

So we started to take the relevant actions to see what we could put in place to help. We sought to change Attica's mind. We sought as a secondary objective to get it to move the date of withdrawal further back in the calendar—members will know that the last sailing is planned for 13 September. We had no success in that, although we bought some additional time before the announcement, which was helpful in exploring some options.

On the day of and in the hours before the announcement, I had further discussions by telephone with the company owners in an attempt to turn them away at the last moment from the course of action that we now know they are taking. I regret that I had no success.

Dr Richard Simpson (Mid Scotland and Fife) (Lab): Will the minister confirm that the ferry service was a commercial success but did not prove to be sufficiently profitable for the company to maintain it?

Stewart Stevenson: Attica says that the route is commercially viable, and we agree with that assessment. However, Attica has had a number of challenges. Its main interest is as a ship broker rather than a ferry operator, and its trading history shows that in this decade it has sold substantially more ships than it deploys on its ferry routes.

We broadly accept that the Superfast ferries that originally served the route could have proved a commercial success. However, other aspects of the business were perhaps not pursued to best effect. The marketing outside the United Kingdom was minimal and ineffective, with the result that a company whose cost base was largely denominated in euros had an income stream that was largely denominated in pounds. As the exchange rate changed, that caused particular difficulties for the company. Those facts illuminate some of the points that Mr Johnstone and Dr Harvie made on where the most effective companies might reside. Recognising that the route is commercially viable, Attica is continuing to make figures available to others who have an interest in operating the route.

Before drawing to a conclusion, I will try to pick up on some points made by members. John Park referred to Michelin Tyre. A key point is that the daily service enabled it to provide a specific facility. The cut to one ship dramatically reduced the effectiveness of the service, and the situation was not helped by the change to the ship that now sails, which has nothing like the original capacity. In 2004, 41,450 units made the crossing, but in 2007 the figure was 22,552—because of capacity constraint rather than anything else.

Jim Tolson spoke about public money. It is worth pointing out that most of it was a capital investment in shore-side infrastructure, which will be available for any future operation. The waterborne freight grant is still available—€2 million is still to be drawn down. Subject to an application being made by a new operator, I would expect it to be available. The Flanders Government is fully engaged; it approached us and we are having discussions with it.

I acknowledge Cathy Peattie's constituency interest. I have met several of the freight operators in her constituency, and she is right that road miles are important. Chris Harvie said that slower ferries might be more effective. I caution him on that because, on a long crossing such as Rosyth to Zeebrugge, and considering the turnaround times, there are significant difficulties with slower ferries.

Alex Johnstone and I will probably continue to disagree about the future structures of the ferry industry in Scotland, but the Government will consider carefully the report from the Transport, Infrastructure and Climate Change Committee when it is published.

Are companies interested in the route? On the public record, I can say that John White of the NORSHUKON group has indicated an interest, and we are continuing discussions with it. We have basically approached everybody we can think of in this country and elsewhere. We are continuing to engage, and there are still options that may deliver a successful outcome. It will be extremely challenging to ensure that there is no break in service—I want to manage expectations on that—but in the longer term there will be opportunities.

The economic climate is tough, and it is a particularly difficult time for anyone to consider new transport services generally. We are continuing to work with people, and I express again our wish and willingness to work with members who are interested in the subject. Today's debate is not the end of the story, merely a part of it. I hope that the members who have attended it feel that all members of all parties are engaged in the issue and recognise its importance.


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