Deal to buy vessels as Northern Isles contract is extended

27th April 2018

A deal has been agreed for the three passenger ferries serving the Northern Isles to be purchased outright by Caledonian Maritime Assets Ltd (CMAL) with loan funding from the Scottish Government.

The MV Hamnavoe, MV Hrossey and MV Hjaltland, which have previously been leased from Royal Bank of Scotland, will be taken into CMAL ownership.

An 18 month extension to the current Northern Isles Ferry Services contract has also been agreed to allow further progress to be made with the ongoing review of procurement policy. Serco NorthLink Ferries will continue to operate the services until 31st October 2019 under the extended contract.

Minister for Transport and the Islands Humza Yousaf said:

“This agreement to buy the three passenger vessels serving the Northern Isles is an excellent piece of business for the Scottish Government.

“Not only does it secure the future of the three vessels that had previously been leased, but it will also deliver savings to the public purse in the longer term.

“We have also agreed an extension to the current Northern Isles contract, which will see Serco NorthLink Ferries continue to run the service until the end of October 2019 under the extended contract. This is a continuation of the current agreement, so there will be no reduction in services. This will allow us to make further progress with the review of procurement policy for future ferry operating contracts.

“Our ferry services are iconic transport links that play a vital role for our island economies. Making sure they continue to support the communities they serve, as well as delivering best value for taxpayer’s money, will always remain at the heart of our ferry operations.”

Kevin Hobbs, chief executive, CMAL said:

“The purchase of the three vessels marks a significant investment in Scotland’s maritime transport infrastructure and strengthens the long-term resilience of services.

“These vessels were built specifically for the Orkney and Shetland routes and their position in Scottish waters is now secure, protecting lifeline ferry services for the islands.”

Stuart Garrett, Serco’s Managing Director of NorthLink Ferries, added: “We are pleased to have been awarded this contract extension and we will be working closely with the Scottish Government and CMAL as the ownership of the passenger vessels is transferred.

“We have a positive history of working with CMAL and look forward to continuing to deliver this service with business as usual during the contract extension.”

Caledonian Maritime Assets Limited press release