Argyll ferries: maintenance and average grant per sailing calculation: FOI release

FOI reference: FOI/18/01899
Date received: 24 July 2018 
Date responded: 2 August 2018
 
Information requested

 

“Is the difference between £3,176,877 and the previsous quoted £2,242,667 represent the the above mentioned adjustments? If so, please provide a breakdown which explains the difference between the two figures. If not, why are there two base case figures?

Why is the cost of fuel excluded from the AGRS claculation? Do the vessels operate on fresh air?”

 

 

I am writing with the formal response to your request.

In relation to the first question, the extract which details the base of £3,176,877 average grant per sailing of £217.08 was superseded by the e-mail of 30 April, which confirms that the grant used for the average grant per sailing was £2,242,667, equating to £153.25 per sailing.

To provide clarity, the extract was part of an overall discussion between Scottish Ministers and Argyll Ferries in reaching a consensus in relation to the average grant per sailing calculation. The figure had not been finalised but was released as part of the FoI review as information held.

To confirm, the agreed average grant per sailing calculation for the extension period between July 2017 to March 2018 was £2,242,667 divided by 14,634, which equates to £153.25.

With regards to why fuel is excluded from the average grant per sailing calculation, Part 7 – Performance and Monitoring Regime of the Public Service Contract between Scottish Ministers and Argyll Ferries confirms the following;

“Average Grant per Sailing means in any Service Year the Grant (excluding Fuel Costs and any additional grant paid pursuant to Clause 24 and/or 25) for that Service Year divided by the number of sailings in that Service Year.”

 

Your e-mail of 17 July 2018 at 21:16 states that you are content that as per the Public Service Contract, fuel is excluded from the average grant per sailing calculation;

“Obviously, this extract explains why fuel is excluded, nevertheless its exclusion still seems very odd indeed”
Your e-mail then goes on to say;

a) “I cannot find any revisions to the PSO which would explain why additional maintenance, the Coruisk charter or any other additional costs, excluding TUPE/Pensions would be excluded from the AGRS calculation.

This has been answered as part of FoI/18/01898.

b) Provide explanations to the following:

Is the difference between £3,176,877 and the previously quoted £2,242,667 (contract extension July 2017 to March 2018) represent the above mentioned adjustments? If so, please provide a breakdown which explains the difference between the two figures. If not, why are there two base case figures?”

The reason for the above difference is due to the fact that the base case for the contract was revised before the start of each contract year to take into account certain contract variations and other permissible costs allowed for in the contract. These additional costs do not readily appear as a standalone contract variation, therefore are not identifiable and can contribute to an increased outturn figure at the end of the contract year.

 

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