SCOTLAND SAYS NO - EUROPE SAYS YES...

Written by Aileen MacNicol Friday, 15 April 2011 08:21

ONE of the major thorns in the sides of those campaigning for the Dunoon-Gourock ferry service is the failure of successive governments to provide the two new vehicle-carrying ferries which would safeguard the route’s future.

The most recent Scottish Government’s Argyll and Bute MSP, Jim Mather, was elected after a promise to deliver where others had failed.
But in its four-year tenure, the administration reneged on its promise - saying that under European legislation, it could not legally do so.
However, Cowal ferry expert Neil Kay this week provided the Standard with evidence to the contrary - an e-mail from the European Commission’s Directorate General for Competition.
Professor Kay contacted Mihail Milev in Brussels in March this year, after former MSP Jim Mather wrote to this newspaper offering his apology for the Dunoon-Gourock debacle.
In that letter, Mr Mather referred to Professor Kay and other local campaigners, saying: “Their dogmatic pronouncements on what is possible under European law have never been matched by actual advice or information from Brussels.”
Mr Mather’s would-be successor, Michael Russell, also spoke out on the matter at a recent recording of BBC Radio’s Brian Taylor’s Big Debate in Ardrishaig.
When challenged on the representations made by Professor Kay, including potential solutions to ensure the future of the vehicle-carrying element of the service, Mr Russell said: “He is not an expert in European law, he is an economist.”
Professor Kay may not in fact be a lawyer - but it appears that his opinions on the Dunoon-Gourock situation do indeed carry some weight in Europe and his previously-suggested solutions would also be permissible under EC legislation.
Asking Mihail Milev for clarification on Mr Mather’s claims, Professor Kay wrote: “I would be grateful if you could confirm whether or not my reading of EC law as it pertains here is consistent with the Commission’s interpretation.”
He said that he did not believe that there was anything in EC law to prohibit the use of any vehicle-carrying ships on a subsidised passenger service with an unsubsidised competitor - providing accounting procedures indicate that there is no subsidy leakage between the passenger and vehicle elements.
This view was upheld by Mr Milev, who advised that using old or new state-funded vessels would not be prohibited where an operator provided a subsidised passenger service along with commercial vehicle transport.
The pertinent detail from both Professor Kay and Mr Milev’s e-mails is reproduced below.
Commenting on the response he received from Mr Milev, Professor Kay told the Standard: “It is quite clear - there was nothing to stop the government building two new vehicle-passenger boats for Dunoon-Gourock as long as accounting measures were put in place to make sure there was no leakage of public subsidy (what the EC calls compensation) to the unsubsidised freight and vehicular traffic.
“In fact, much the same measures that are in place in the present tender are designed explicitly for that purpose, except they will not be needed because there will be no suitable vessels available.
“There are none on the second-hand market and no new ones, because the government has not built them, despite its 2007 election promise.”
The current tender documents say that any operator is free to bring its own boats, but this, said Professor Kay, is an “irrelevance.”
“As we have seen and confirmed for year, there is not even one suitable, modern, 12-knot, 40-car bow and stern loading ferry on the second-hand market, let alone the two that would be needed to operate the route.
“You have to build them specially - as CalMac does for every other route.”
The latest Dunoon-Gourock tender process has, like the others, been a complete shambles - but the 2011 version seems to be the worst of the worst.
First there was a protracted delay which was blamed on the European Commission - despite Freedom of Information data showing there had been minimal contact between the two.
The Scottish Government eventually revealed that it had held discussions with CalMac’s private competitor about taking over the route - a situation which, if it had materialised, would have resulted in a complete monopoly, undoubtedly a threat to a fragile local economy.
The ‘bring your own boats’ option was much vaunted by the Scottish Government - but again, research showed that the possibility of an operator being able to source suitable ships was virtually non-existent.
And finally, the claims that the state could not legally provide new ships because of EC law appear to have been negated also.
Conspiracy theories about the ferry issue have abounded for years - but in the last twelve months, the community has learned enough (despite a deafening silence from those in authority) to suggest that the reality may be much worse than ever feared before.
With Transport Scotland’s refusal to disclose even the most basic information about the up-to-date status of the tender process, the community must simply wait and see.
But in light of all that has been said and not said, and all that has been uncovered by the likes of Professor Kay and others who care about the route, there is surely a need for a major inquiry into the last Scottish Government’s handling of this situation. It may be too late to do anything for the community which has fought so hard - but it might, finally, highlight the truth.

WHO SAID WHAT? The key points:

“Professor Kay is not an expert in European law, he is an economist.” (Michael Russell, SNP candidate, on Brian Taylor’s Big Debate, BBC Radio, April 1)

“It is fact  that resources cannot legally be provided to provide new boats on a route on  which there is commercial competition. Should any government try to do so it  would be subject to legal action from other operators and very expensive  infraction proceedings from the European Union. These are also facts. None of  them were clear in 2007 but they are now –alas – incontrovertible.”
(Jim Mather in the Standard, February 4)

“I do not  believe the 1992 Regulation or any other aspect of EU law prohibits or prevents the use of any vessels (whether old or new) carrying vehicles on any route in which there is a PSO and compensation for a pedestrian service (such as  Gourock-Dunoon), and where there is an unsubsidised competing vehicle service,  as long as appropriate accounting procedures are adopted to both prevent and  demonstrate that there has been no leakage of compensation from the public  service obligation to any unsubsidised and commercial vehicle-carrying aspect”. 
(Neil Kay to European Commission, March 4)

“There is  no prohibition to use (old or new) vessels provided by the state on a route where a PSO is imposed on passenger transport, whereas vehicle transport is also  provided  on commercial terms by the same service provider…  separate accounting and appropriate cost allocation between the passenger and  vehicle transport should be ensured.”
(EC Competition Policy Directorate to Neil Kay, April 11)