First EC evidence to be taken on CalMac subsidies
David Ross Herald Newspaper April 30 2008
The European transport commissioner arrives in Scotland tonight and will begin taking evidence on how the country subsidises its ferry services. His visit comes as fears grow of new threats to the Caledonian MacBrayne network, presented by the European Commission itself.
Jacques Barrot is due to meet representatives from CalMac, Western Ferries and Northlink in Edinburgh tomorrow. His visit coincides with the appearance of the European Commission's 34-page Decision document explaining why it has launched its investigation. This reveals that the EC will investigate ferry subsidies all the way back to 1995, anything up to £500m which could be seen as potentially illegal state aids.
Mr Barrot will also meet MEPs and representatives of the Scottish Government.
It raises again the possibility of the CalMac network being broken up,
by questioning whether it was right to put all but one of its routes out
to tender in one bundle.
Stephen Boyd, assistant general secretary of the STUC, said last night:
"We are deeply concerned by the detailed reasons for the EC's inquiry
as revealed in their Decision document. Just when we thought our ferry
industry could enjoy six years of stability after the tumult of the tendering,
it looks as though we might have another two years of fighting to protect
"We will be writing to the commissioner seeking a meeting and asking
him to explain why it is that when he met us in September 2005 he made
clear he was entirely happy with the Scottish Executive's approach to
tendering, but now he has signed a document which means that everything
is back in the melting pot."
He added: "It also has to be said that academics like Professor
Neil Kay, whose views were summarily dismissed by key figures in the Scottish
Executive, have effectively been vindicated.
"It has always appeared likely to the STUC that if the European
Court recognised that subsidised bus services in a German city were in
need of the court's protection, it would take little to persuade the court
that so were lifeline ferry services to our fragile island communities.
Professor Kay argued that, but was ignored."
Mr Kay had also been unsuccessful in persuading the Scottish Executive
of the need to clearly define Public Service Obligations to justify subsidising
routes. The EC's document confirms this had indeed been required.