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Scottish Government Award Serco £450m Contract for Northern Isles Ferry Services

13th October 2019
Northlink Ferries Hamnavoe which AFLOAT adds operates between the Scottish mainland and Orkney, where the impressive 449 foot 'sea-stack' of the Old Man of Hoy forms part of the island archipelago. The 600 passenger/92 car/20 lorry capacity ferry was built in 2002 by Aker Finnyards. The same Finnish shipyard launched in the previous year Irish Ferries Ulysses. Northlink Ferries Hamnavoe which AFLOAT adds operates between the Scottish mainland and Orkney, where the impressive 449 foot 'sea-stack' of the Old Man of Hoy forms part of the island archipelago. The 600 passenger/92 car/20 lorry capacity ferry was built in 2002 by Aker Finnyards. The same Finnish shipyard launched in the previous year Irish Ferries Ulysses. Photo: Serco-facebook

International service company, the Serco Group plc has been selected by the Scottish Government as preferred bidder in the contract to continue managing and operating the lifeline of Northern Isles Ferry Services to the Orkney and Shetland islands. 

The passenger and freight services between the Scottish mainland (Scrabster) to Orkney Islands and (Aberdeen) Shetland Islands, provides essential access and supplies for the islanders. The outcome of the tender was announced last month by the Minister for Energy, Connectivity and the Islands to The Scottish Parliament.

There is currently a mandatory standstill period following the appointment decision. The new contract will ensure continuity of service, is anticipated to start in the fourth quarter and has a total estimated revenue value to Serco of approximately £450m over the initial six-year term. There is an option for Scottish Ministers to extend the contract for a further two years, valued at a further £160m.

Serco will build on the strengths and experience gained over the past seven years of operating the NorthLink Ferries franchise. Key features and improvements will include:

  • continuing to undertake the planned maintenance and dry docking of the vessels (see story CMAL acquire ferries) in Scotland, to ensure strong levels of resilience with reduced time away from service;
  • improvement of the terminal facilities at Hatston, Kirkwall in the Orkney Islands, and enhanced passenger information systems at all the terminals;
    a new smart ticketing system for foot passengers;
  • a new demand analysis and forecasting model to inform and improve accuracy and confidence in passenger and freight requirements;
  • a new ‘Green Travel’ campaign aimed at customers and employees, together with a new Carbon Reduction strategy to reduce emissions.

Rupert Soames, Serco Group Chief Executive, said: “We are delighted to have been awarded this contract by Scottish Ministers. We are very proud of our track record over the past seven years, during which time we have improved almost every aspect of the lifeline service for the communities and businesses of the Northern Isles, while also reducing materially the annual subsidy and thereby reducing the burden on the Scottish taxpayer. We look forward to further improving the service in the coming years.”

Since Serco first began managing the service in 2012, all aspects have been improved in terms of customer satisfaction, reliability, safety and community support.

According to Serco, passenger numbers have increased by 18%, vehicle traffic by 38% and freight volumes by 24%. Reliability performance is 99.97%. Employment of people from the local communities has increased by 18% and Serco NorthLink Ferries is the first Scottish ferry company to achieve Investors in People Gold rating.

Furthermore, Serco sources over 80% of food, beverage and retail services from within a 50-mile radius of the operating ports, an increase from 12% since 2012.

Since 2013 the vessels have undergone significant upgrade and improvement including: new and additional reclining pod seats; upgraded premium cabin facilities; new locally sourced Glencraft mattresses for all cabins; and the new Magnus lounge and shower facilities for those not travelling in a cabin.

Published in Ferry
Jehan Ashmore

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Jehan Ashmore

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Jehan Ashmore is a marine correspondent, researcher and photographer, specialising in Irish ports, shipping and the ferry sector serving the UK and directly to mainland Europe. Jehan also occasionally writes a column, 'Maritime' Dalkey for the (Dalkey Community Council Newsletter) in addition to contributing to UK marine periodicals. 

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Ferry & Car Ferry News The ferry industry on the Irish Sea, is just like any other sector of the shipping industry, in that it is made up of a myriad of ship operators, owners, managers, charterers all contributing to providing a network of routes carried out by a variety of ships designed for different albeit similar purposes.

All this ferry activity involves conventional ferry tonnage, 'ro-pax', where the vessel's primary design is to carry more freight capacity rather than passengers. This is in some cases though, is in complete variance to the fast ferry craft where they carry many more passengers and charging a premium.

In reporting the ferry scene, we examine the constantly changing trends of this sector, as rival ferry operators are competing in an intensive environment, battling out for market share following the fallout of the economic crisis. All this has consequences some immediately felt, while at times, the effects can be drawn out over time, leading to the expense of others, through reduced competition or takeover or even face complete removal from the marketplace, as witnessed in recent years.

Arising from these challenging times, there are of course winners and losers, as exemplified in the trend to run high-speed ferry craft only during the peak-season summer months and on shorter distance routes. In addition, where fastcraft had once dominated the ferry scene, during the heady days from the mid-90's onwards, they have been replaced by recent newcomers in the form of the 'fast ferry' and with increased levels of luxury, yet seeming to form as a cost-effective alternative.

Irish Sea Ferry Routes

Irrespective of the type of vessel deployed on Irish Sea routes (between 2-9 hours), it is the ferry companies that keep the wheels of industry moving as freight vehicles literally (roll-on and roll-off) ships coupled with motoring tourists and the humble 'foot' passenger transported 363 days a year.

As such the exclusive freight-only operators provide important trading routes between Ireland and the UK, where the freight haulage customer is 'king' to generating year-round revenue to the ferry operator. However, custom built tonnage entering service in recent years has exceeded the level of capacity of the Irish Sea in certain quarters of the freight market.

A prime example of the necessity for trade in which we consumers often expect daily, though arguably question how it reached our shores, is the delivery of just in time perishable products to fill our supermarket shelves.

A visual manifestation of this is the arrival every morning and evening into our main ports, where a combination of ferries, ro-pax vessels and fast-craft all descend at the same time. In essence this a marine version to our road-based rush hour traffic going in and out along the commuter belts.

Across the Celtic Sea, the ferry scene coverage is also about those overnight direct ferry routes from Ireland connecting the north-western French ports in Brittany and Normandy.

Due to the seasonality of these routes to Europe, the ferry scene may be in the majority running between February to November, however by no means does this lessen operator competition.

Noting there have been plans over the years to run a direct Irish –Iberian ferry service, which would open up existing and develop new freight markets. Should a direct service open, it would bring new opportunities also for holidaymakers, where Spain is the most visited country in the EU visited by Irish holidaymakers ... heading for the sun!

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