Argyll ferries: average grant per sailing calculation: FOI release

Information request and response under the Freedom of Information (Scotland) Act 2002.

FOI reference: FOI/18/01898
Date received: 13 July 2018 
Date responded: 13 August 2018
Information requested
“Why is TS paying for additional maintenance costs when the PSO clearly states that the maintenance risks and costs rest with the operator not the taxpayer.

Why if TS is paying for these additional costs (pension, maintenance, hire, etc,) is the cost then excluded from the AGRS calculation.”
I am writing with the formal response to your request.

In relation to the first question, as per the response to FoI/18/01686 /publications/foi-18-01686/ you were advised that due to decisions taken by Scottish Ministers, the vessels which operate the service were used more frequently that originally anticipated. Consequently, any additional maintaintance costs over and above that which was already included in the Public Service Contract were allocated to Transport Scotland.

With regards to your query as to why certain costs are excluded from the average grant per sailing calculation, the same rationale as above applies. Due to the fact that some Ministerial decisions have led to an increase in certain costs of the operation of Argyll Ferries, the deployment of the MV Coruisk being one such example, Transport Scotland took the deision to exclude these from the calculation of the average grant per sailing.

Your e-mail of 17th July 2018 at 21:16 requested Transport Scotland to provide the following information which is related to this request;
Provide explanations to the following:

Additional maintenance, what element of this spend relates to additional usage as per the switch as opposed to general cost inflation in respect to the general condition of the vessels and routine/scheduled maintenance.

We have previously provided information in FoI/17/01857 /publications/foi-17-01857/ which splits out costs for Contract Year 3 of the vessel switch. As Scottish Ministers agreed to the switch and to fund the initiative for the remainder of the contract, the increased maintenance costs have been subsumed into the revised base cases going forward.

Part of the increased maintenance of £75,549.15 as specified within Contract Variation 28 of the Public Service Contract relates to some regulatory and safety equipment that Transport Scotland agreed to fund, given changes to applicable law and directives by the MCA. These could not have been known or factored into Argyll Ferries Ltd initial bid and as such Transport Scotland agreed to fund these increased maintenance costs.

In relation to the remainder of the £75,549.15, while our aim is to provide information whenever possible, in this instance we are unable to provide this information because exemption under Section 33(1)(b), commercial interests of FOISA applies. This is in regard to specific financial details with regards the maintenance regime of the operator, Argyll Ferries Limited. The reasons why these exemptions apply are explained below.
Reasons for not providing information
Exemptions apply, subject to the public interest test.
Section 33(1)(b) – Commercial interests
An exemption under section 33(1)(b) of FOISA (commercial interests) applies to some of the information held by Transport Scotland relating to specific financial details with regards the maintenance regime of the operator Argyll Ferries Limited. This exemption applies because disclosure of this information would, or would be likely to, prejudice substantially the commercial interests of Argyll Ferries Ltd.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open and transparent government, and to help account for the expenditure of public money. However, there is a greater public interest in protecting the commercial interests of Argyll Ferries Ltd to ensure that we are always able to obtain the best value for public money.

Argyll Ferries Ltd operate a service under contract to the Scottish Ministers that was won following a competitive tendering exercise and also faces competition from your company, Western Ferries, for carriage of passengers. Disclosing their financial information would be likely to place Argyll Ferries Ltd, or their parent company David MacBrayne Ltd or any other subsidiary companies in the group, at a competitive disadvantage in any future tendering exercises.

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