Reducing the age of Scotland’s ferry fleet will be ‘financially challenging’

Transport minister Jenny Gilruth has told MSPs she does not know how much it will cost to meet a key target to reduce the age of the ferries operating on lifeline routes in Scotland – but said it would be “financially challenging”.

Transport Scotland has the goal of reducing the average age of the ferry fleet to “around 15 years” by the end of this decade.

Kevin Hobbs, the CEO of Caledonian Maritime Assets Limited (CMAL) – the Scottish Government-owned body which owns the CalMac fleet as well as ports and harbour infrastructure – said the most recent figure they had for the cost of achieving this was £1.4 billion.

But he told MSPs on Holyrood’s Transport Committee that figure had been based on an inflation rate of 2% or 3%.

Acknowledging the problems Scotland’s island communities have had with breakdowns and maintenance having an impact on ferry schedules, Mr Hobbs said: “We are very aware of resilience issues.

“We are very aware we haven’t got an average age of fleet of 15 years – it is about 24 and a half at the moment, which is not where we would ideally like to be.”

Ms Gilruth meanwhile said: “Island communities deserve better than the service they have been experiencing in recent times, and I am wise to that.”

She added: “We need to bring about greater resilience in the CalMac fleet, that is exactly why in the last 12 months I have accelerated investment into the fleet.”

Scottish Tory MSP Liam Kerr pressed the minister on the cost of reducing the age of the ferries being used, asking Ms Gilruth: “Do you have an idea what the cost will be to achieve a fleet that is around 15 years old at the end of the decade now, adjusted for inflation? And will CMAL have enough money to do it?”

She responded: “The straight answer to Mr Kerr’s question is not now, in relation to the inflationary impacts.”

The minister told the committee that all areas of the Scottish Government were being affected by the high rate of inflation, saying this has “limited our potential to create investment in lots of parts of the transport network”.

Ms Gilruth said in the last financial year the government had been “able to leverage additional investment”, adding this could be “crucial to getting us to that reduction in the average age of the fleet”.

But she added: “I make no bones about it, this will be financially challenging for the Government.”

Earlier, Mr Hobbs had told the committee inflation made it “quite difficult to predict” how much it would cost to achieve the reduction in the average age of the ferry fleet.

He stated: “When we last looked at it properly, which was this time last year, we had an overall spend across the Northern Isles for the ships, across the Western Isles for the ships and the ports of about £1.4 billion.

“However, that was premised on a 2% or 3% inflation rate at the time. So it is absolutely true to say with 10% inflation we can’t buy as much as we thought we were going to buy.”

CMAL has been given a five-year package of £580 million, with an additional £115 million from the Scottish Government, to help reduce the age of vessels.

And Mr Hobbs said provided the money “doesn’t fall away” after that, he was “confident we will get below 15 years as an average age”.

Four new ferries are currently being built in Turkey, he added, telling MSPs that CMAL was “literally going to the other ends of the earth” to try to buy second-hand ships to replace some of the aging ferries.

CMAL recently tried to buy a ferry that had been operating between the north and south islands of New Zealand – with Mr Hobbs saying they had been “outbid by somebody with much deeper pockets than us”.

He described that as being a “huge disappointment”, adding: “We are continually looking, hundreds and hundreds of ships over a five-year period – 650 in fact we have looked at, most of which aren’t suitable at all.

“But if we come across something that we consider is suitable about it, we speak to the operator about … so we are literally going to the other ends of the earth to try to resolve these issues.”